The term Pump and dump is a term used to define a particular type of stock fraud or stock market manipulation. It briefly means that a perpetrator buys cheap shares of a company, then makes somebody promote it. If there are enough stupid people to believe the hype and buy the stock, the price of the shares goes up, and the perpetrator sells them at a profit.

In this context the promotion is by spam, but the method itself is very old, originally done by spreading rumors in pubs, then more recently by using junk-faxes.


Stock spam is any spam message which (usually) contains no link or other payload for the recipient, but does contain either flat text promoting a particular stock symbol, or an attached gif, usually obfuscated in some way, whose text contents say approximately the same thing. This is sent in the hopes that recipients will blindly purchase shares of the stock in high quantity, causing the stocks price to briefly rise.

Detailed DefinitionEdit

Basic Stock SpammingEdit

The purpose of this spam is to cause a market manipulation known as a "pump and dump". There are numerous definitions of this particular scam on the Internet, notably at the main Wikipedia site. [Wikipedia's Pump and Dump entry]

A quote from that article:

"Pump and dump" (aka "Stock Dump" and "Hype and Dump Manipulation") is
a term used to describe a form of financial fraud that typically
involves artificially inflating the price of a stock or other security
through promotion, in order to sell at the inflated price (creating
artificial demand). This practice is illegal under securities law, yet
it is particularly common. While fraudsters in the past relied on cold
calls, the emergence of the Internet offered a cheaper and easier way
of reaching large numbers of potential investors.

The stocks involved in these scams are traded on what are called the Over The Counter (or "OTC") markets, also known as the "Pink Sheet" markets. They rarely leave the $10 range in terms of market value and they are nowhere near as regulated or stable as the more familiar New York Stock Exchange (NYSE) or the Nasdaq exchange.

In short: A spammer (or his employer - see below) purchases a large volume of a stock at a very low price. Spammer creates several fake "press releases" to drum up interest in this otherwise unknown stock. Spammer spams millions of people, in the hopes that a few of them (typically less than 1%) actually buy the stock, causing the price of the stock to rise. Spammer waits until a certain threshold has been reached. Spam recipients purchase stock in medium volumes. Spammer sells stock. This causes the price of the stock to drop. Spammer has made a profit. Fooled spam recipient has probably suffered a loss.

That's an extremely top-level, brief description, and it doesn't cover a lot of the details of why this causes the price to fluctuate, but it's essentially what is going on in a scam like this. The numbers are all over the place with these scams as well. A spammer may purchase (literally) millions of shares at a price around $0.01 (1 cent) and wait until the price reaches only $0.04 (4 cents). If enough people fall for it and the price is manipulated to that level: the spammer has essentially quadrupled his investment. In almost every single case, people who have purchased the stock after a spam run have seen a precipitous drop in the share price of the stock.

All of this is done at virtually no material cost to the spammer. They merely hit "send" and wait to see the price rise. By "send" we mean that they employ a very large botnet to deploy literally tens of millions of email messages per day. Some have deployed in the hundreds of millions of messages in a single day.

Stock manipulation is fraud. Plain and simple. In every country where stocks are available for sale or purchase, any stock or market manipulation is a very serious crime. Unfortunately a lot of the international law around this particular scam is not strong enough to pinpoint when someone has broken the law, or whether they stood to profit or not.

In the United States, market manipulation of this sort is defined as a class-A felony and is charged under terms like "market manipulation" or "securities fraud." The Securities Exchange Commission (SEC) - the oversight commission which monitors all trade activities and investigates any suspicious ones - is the organization which oversees the smooth running of all stock transactions and markets within the US, and is also the place to send complaints regarding stock spamming (see below). Overseas and in other countries you may need to look up the specific oversite authority, but so far it looks like the SEC is the mainstay for reporting securities manipulation, whether it's perpetrated via spam, or junk faxes, or other means.

"Sponsored" Stock SpammingEdit

Additionally: There has come to light a secondary method of profiting from stock spam, one that makes it much harder to track down the criminals behind the operation, as well as identifying those who actually profited from the market manipulation. This is much more complicated to describe and has been gleaned from open discussion on the part of several large-scale, career spammers who appear to be intimately knowledgeable about stock spamming in general, and this specific modality in particular.

As briefly as possible, it works like this:

There are three entities: the spammer, the spam recipient (aka: victim) and someone called a "stock sponsor". The sponsor is possibly an independent investor or a broker. He is the person who will directly profit if the stock goes up in price. He usually has invested several hundred thousand dollars into a variety of penny stocks.

The sponsor seeks out a spammer with an active and extremely large botnet, and tells him to start spamming at a time when the stock has gone down to some predetermined threshold. The spammer will earn a commission directly related to the rise in price of the stock. (The exact value of this commission is unknown.) The spammer begins spamming, hitting as many people, as many times as possible over the course of several days. The numbers are something like 120 million emails per day, employing a botnet of at least 70,000 infected computers (or "zombies") in size. It could easily be higher.

Usually within the same day that the spam is sent, the price of the stock will drop, so the assumption is that mere moments after sending the spam, the sponsor begins monitoring the affected stock. Anywhere from several hours to within a full business day of spamming, the sponsor sells a large quantity of the stock. The range of profit is approximately from 6% to 12%, based on anecdotal evidence. Many large-scale stock spammers have claimed that the average profit from this operation is in the high six figures per spam-run.

The caution employed regarding this particular version of stock spamming is underscored in every discussion of using sponsors, in numerous spammer forums. Very often the spammer warns that no record of any conversation between the spammer and the sponsor should ever exist. Nothing should be emailed. No phones of any sort should be used, and no written notes should be taken. This makes it clear that the spammers are very much aware that this is a fraudulent act, and that it is completely illegal.

Spam ExamplesEdit

As stated above, these spam messages attempt to promote stocks using either text or a graphic (usually a gif). An example of each follows:


Just take a look at this one.

Search for: GDKICurrent price: $0.14 5 Day Target price: $0.95Market: bullish!!

Watch out! This sym is going to explode! Take it to your portfolio immediately!

See the hottest news of the GDKI, info.


Promoting sym: GDKIPrice: $0.14 5 Day Target price: $0.95Action: Strong buy!!

Short-Term Bullish. Insider Buying Alert!!!

See the hottest news of the GDKI, info!!!

As you can see, the text versions tend to be really erratically written, and rather frantic in their use of all caps and exclamation points.


Wbrs stockspam image

An example spammed image promoting the stock WBRS from January, 2007

20070219 GDKI alternate

An example spammed image promoting the stock WBRS from January, 2007

20070707 VPSN

Sample PDF spam from July, 2007

You will notice that the gif is somewhat obscured. This is a technique the spammers behind these numerous image spam runs are attempting to get around some of the more sophisticated spam filters in the market. This obscuring even carries through to attached PDF format images.

What Can Be Done About It?Edit

First of all, we don't recommend buying the stock. If you believe that the price will go up, well, usually it does. But you can't know if you were among the first who got the mail. If you come along later, or if you sell your stock later than the perpetrator (that's very probable), you have been had.

Forward the entire spam email as you received it, making sure to include all headers and all image or other attachments (lately they've turned almost exclusively to using some retardedly formatted gifs to get around spam filters.) Send these to the SEC's enforcement division via email at:

Additionally, all the stock spam can be copied to - preferably as attachments, but you can see the instructions. Those spams will get the attention of authorities that watch the stock market.

It should be noted that the companies promoted in the stock spam typically are victims as well, and it should not be assumed that the company is behind the spam. While the stock of some of these companies may initially rise as a result of the spam, they typically fall quickly below the original market value. It would not be to the company's advantage to market this way. As noted above, the spams are usually generated by a third party investor who is hoping for personal gains. Forwarding spams to will allow the investigators at the SEC to determine the company's involvement, if any, with the spam.

Other things you can doEdit

If you're really mad about it, join some stock trading forums and talk up the fact that you're not even an investor and all you get is spam for the particular stock in question. Places like or feature areas which talk about general trading of penny stocks and you'll often see some otherwise smart people on the verge of being duped by these spam messages ("That looks pretty cool, should I buy it?") Get in there and spread the word that a manipulation is underway.

When joining and posting on these forums, it's recommended that new members don't just go in there and start complaining that you got spammed. Be specific and talk up the fact you'd never heard of this stock any other way, and that you're under the impression that a criminal element is attempting to manipulate the market. Also if you don't know that much detail about trading or stocks in general (which is fine,) don't go into detail, just mention that it's being spammed to death and that you have seen spam messages touting the stock. Traders are the ones who fuel the money-making end of the deal. If they don't buy, spammers don't profit from it.

Does Reporting Work?Edit

After receiving and investigating reports of stock spamming and stock fraud, the SEC in conjunction with many international law enforcement representatives do eventually investigate, and your evidence (in the form of your forwarded spam) goes into a huge pile of data that law enforcement around the world can use to track the spam run to the individual who hoped to profit from the stock. To date, several dozen such fraudulent individuals have been successfully investigated and arrested. The following links outline several recent high-profile arrests of blatant stock fraud criminals:

Additionally, on March 8th, 2007, the SEC (see Press Release) took action against 35 heavily-spammed companies, suspending trading for 10 business days due to "questions regarding the adequacy and accuracy of information about the companies". This means they doubted the validity of the companies in total, not just the fact that the stocks were spammed heavily, resulting in very obvious fluctuations in their share price.

This had the additional effect of causing Pink Sheets CEO Cromwell Coulson to state that no matter what the outcome of the suspension, he would be removing all 35 stocks from the Pink Sheets index. This is a devastating blow to stock spammers and those who profit from this illegal act.

You can additionally send complaints of stock spam to the PinkSheets index directly by emailing

Other ConnectionsEdit

As mentioned elsewhere on this Wiki, spammers behind stock spam are also actively involved in numerous other illegal activities related to spamming in general. Most notably, several links have been made between December 2006 stock spam runs, and spam runs for websites including the illegal pharmacy website Discount Pharmacy and the illegal, fake online "charity" The similarity between the images used as attachments, as well as the trail of IP addresses used to send the actual spam messages (identifying them as being part of the same monitored botnet) have connected well-known spammers like Vincent Chen to these stock spam runs.

Further: It has been observed that several spam operations - notably large-scale illegal pharmaceutical spam gangs - will resort to spamming stocks when they have their pharmacy websites shut down. This has most notably been seen with regards to the well-known My Canadian Pharmacy spam runs. In May and June of 2006, an active and aggressive campaign to report and shut down as many MCP domains as possible was undertaken by several members of the antispam community. Almost without exception, email accounts which would have been deluged with only spam messages promoting MCP websites began exclusively receiving stock spam messages. This was a repeatable effect, noted many times throughout the summer of 2006.

Further ResearchEdit

Ad blocker interference detected!

Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.