Home » Uncategorized » Stock fraud sent by SMS

Stock fraud sent by SMS

Coming on the heels of phissing, email frauds etc, it seems the con factory works overtime to come with newer tools for fraud. The latest in-thing is using SMS to fool people into buying or selling stocks.

On Tuesday the national association of securities dealers and other US securities regulators issued an alert advising investors to be wary of “hot” stock tips delivered to their cellphones via SMS in a new twist to “pump and dump” stock fraud.

The scam works in a very simple way, the fraudster sends out text messages to investors in the form of “Hot” tips mostly of small, thinly traded stocks thus inflating the price and thereafter selling their shares at a profit. This may cause loss to ordinary investors once the share price start to climb down due to dumping of shares touted.

The text messaging is not an on off incident, it found precedent in the late 1990’s stock market boom where perpetrators employed emails, internet message boards, write ups in financial publications to tout the shares of a company. In more recent years even telephones and faxes have been used.

In a statement, John Gannon, NASD’s vice-president for investor education said “The emergence of text messaging offers fraudsters another cheap and easy way to reach large numbers of potential investors. Now more than ever, investors need to be vigilant about doing their homework before investing and taking the necessary steps to reduce the likelihood of falling prey to these scams.”

NASD further added that investors should understand the basic rule of investing i.e. to never to rely on information coming from unsolicited sources, be it a cellphone text message, e-mail, fax or phone call.

NASD has also asked investors who have received text messages to send the messages to regtipsat@nasd.com

About Ritwik Sinha

Check Also


Try Oculus Rift And Wii To Roam Around On The Back To The Future Hoverboard

Check out how you can fly in virtual space by using an Oculus Rift and a Wii Balance Board.


Amazon Appstore for Android Holiday Deals, Including Free Apps

There are tons of deals from the Amazon Appstore that will be offered starting now and throughout the holiday shopping season. They say that they will have "hundreds of titles that are eitehr free... or available between 50-90% off" the regular price.


Black Friday: Google Play Store Apps, Games and Content on Sale All Weekend

Case in point, if you head over to the Google Play Store right now, you'll find that Google is celebrating all Cyber Weekend with discounts on all sorts of content. This includes many popular apps and games


Black Friday Deal: Samsung Galaxy Tab 3 10.1-Inch for $100 Off

Did you manage to score any epic Black Friday deals this morning? Are you still ...


Arduino Co-Creator Releases Plans for $200 DIY Mobile Phone

Mellis was one of the people who came up with the now hugely popular Arduino platform and now he has come up with plans for people to build their own cell phone for about $200 in parts.


No Discounts for Apple Black Friday, Just Free Gift Cards

If you were hoping to save yourself some cash as you brave the Black Friday shopping crowds, you'll want to go somewhere other than the official Apple Stores.