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Spammers launch MP3 pump and dump scam

26 October 2007  |  7114 views  |  0 Spammers launch MP3 pump and dump scam

In a new twist to market manipulation schemes, fraudsters are now using MP3 files to promote stock for pump and dump scams.

US anti-spam outfit SpamStopsHere says spammers have begun attaching MP3 files, named after popular recording artists and songs, to spam e-mail.

After the recipient has opened the attachment, an electronically enhanced voice delivers a message promoting a stock for a particular company.

SpamStopsHere provides an example of a pump and dump MP3 message that can be heard here.

The company says the message is designed "to encourage the recipient to invest in a particular company" in order to artificially inflate the price of shares. The fraudster then sells their shares after the stock price has risen.

"What we are seeing right now is just a test by spammers to determine the effectiveness of MP3 spam," says Ted Green, president of SpamStopsHere.

However Green adds that it is unlikely that people will fall for an MP3 spam more than once or twice, as it is easier to ignore than text and image spam. "I don't think that MP3 spam on iPods is feasible," he adds. "But spammers certainly are looking to target the new Apple iPhone."

Earlier this week US securities regulator The Financial Industry Regulatory Authority warned investors that there had been an increase in energy-related pump and dump e-mail scams during the past few months.

The increase in energy-related stock scams follow the recent surge in oil prices, which have doubled over the last two years.

Finra warned that these energy stock scams typically involve small unknown companies, using a combination of "baseless price predictions, misrepresentations and hyperbole".

Mary Schapiro, Finra, CEO, says: "We issued this alert to remind investors to be sceptical and to investigate the company and its claims before investing."

New research released by Microsoft earlier this week found that 31.6 million phishing scams were detected across the world during the first half of 2007, an increase of more than 150% over the previous six months.

The study also shows a 500% increase in trojan downloaders and droppers, malicious code used to install files such as trojans, password stealers, keyboard loggers and other malware on systems.

"We are seeing cybercriminals becoming more sophisticated, diverse and targeted in their methods of stealing personal information," says Ben Fathi, corporate VP of development for the Windows core operating system division at Microsoft. "Personal information is the currency of crime, and malicious attackers are targeting it to make their cyberattacks and other scams more authentic, credible and successful, and to make a profit."

Microsoft also released findings from a survey - conducted by the Ponemon Institute - of more than 3,600 security, privacy and marketing executives across a range of industries in the US, UK and Germany which found that as security threats increasingly target personal information, more collaboration among security and privacy officers is critical to avoid costly compromises or breaches of personal information.

With security threats increasingly posing a greater threat to privacy, data protection requires involvement from several groups within an organisation, says Microsoft.

Where the collaboration between security and privacy functions is good, the risk of a data breach is lower. Around 74% of companies that admitted to poor collaboration said they had experienced one or more significant data breaches in the last two years. However 29% of companies that claimed to have good collaboration reported one or more breaches in the same period.

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