SEC suspends trading of firms tied to 'pump-and-dump' spam

'Bout time:

- http://preview.tinyurl.com/2sph3d
March 08, 2007 ~ "The U.S. Securities and Exchange Commission (SEC) today suspended trading on shares of 35 companies that it said have been the subject of repeated "pump-and-dump" spam campaigns. "When spam clogs our mailboxes, it's annoying. When it rips off investors, it's illegal," SEC Chairman Christopher Cox said in a statement. "Today's trading suspensions, and actions that will follow, should send a clear message to spammers: The SEC will hold you accountable." The 10-day suspensions took effect today… Part of what the SEC dubbed as "Operation Spamalot," today's action was applauded by Paul Henry, vice president of technology evangelism at Secure Computing Corp. "This has been a long time coming. We've been tracking roughly 600 stock symbols associated with pump-and-dump spam in the last year, and these 35 are the most massively spammed of them all. The SEC got this right"…"

FYI…

- http://preview.tinyurl.com/3x9wln
March 12, 2007 ~ "InfoWorld - A grand jury in Omaha, Nebraska, has indicted three people on charges of conspiracy, fraud and aggravated identity theft related to a "high-tech" scheme to hijack online brokerage accounts, the Department of Justice and the Securities and Exchange Commission announced. The 23-count indictment, returned in January and unsealed Monday, charges Jaisankar Marimuthu, 32, and Chockalingam Ramanathan, 33, both of Chennai, India, each with one count of conspiracy, eight counts of computer fraud, six counts of wire fraud, two counts of securities fraud, and six counts of aggravated identity theft as part of this "hack, pump and dump" scheme. The indictment also charges Thirugnanam Ramanathan, 34, a native of India and resident of Malaysia, with one count of conspiracy, two counts of computer fraud and two counts of aggravated identity theft, the DOJ said. Marimuthu and Thirugnanam Ramanathan have been arrested in Hong Kong. The DOJ has identified more than 60 customers and nine brokerage firms in the U.S. and elsewhere as victims, with one of the brokerage firms reporting more than $2 million in losses. This case is the first time that individuals have been arrested overseas in connection with an online brokerage intrusion scheme perpetrated in the U.S., the DOJ said…"
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- http://omaha.fbi.gov/dojpressrel/2007/om031207.htm
MARCH 12, 2007 ~ "…“Identity theft and securities fraud not only result in significant harm to individual victims, but also cause severe monetary loss to our financial institutions and erode public confidence in the securities and investment markets,” said FBI Executive Assistant Director Mason. “The FBI will continue to work with our law enforcement and financial institution partners to eliminate fraud and identity theft schemes that target the American public and our economy.”
“Hackers who prey on American investors—no matter what continent they’re operating from—are meeting their match with powerful adversaries in the Department of Justice and the Securities and Exchange Commission. We will go anywhere on earth to stop these thieves and hold them accountable,” said SEC Chairman Christopher Cox.
Marimuthu was arrested on Dec. 20, 2006, by the Hong Kong Police on charges of computer fraud, money laundering, and possession of equipment to make a false instrument. These Hong Kong charges concern crimes similar to those charged in the U.S. indictment. Thirugnanam Ramanathan was arrested by authorities in Hong Kong on Jan. 26, 2007, pursuant to a U.S. provisional arrest warrant. Chockalingam Ramanathan is at large. The government will seek the extradition of the arrested defendants to face charges in Nebraska. The conspiracy and computer fraud charges in this case each carry a maximum sentence of five years in prison. Wire fraud and securities fraud carry maximum sentences of 20 and 15 years respectively. Each count of aggravated identity theft adds two years in prison…"

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FYI…

Interesting German pump-and-dump spam
- http://isc.sans.org/diary.html?storyid=2799
Last Updated: 2007-05-14 07:39:59 UTC ~ "If you have a -European- e-mail address, you may have received some interesting pump and dump spam over the last few days, related to a stock on the Frankfurt stock Exchange. So far these messages have been mildly succesful: while the stock value hasn't changed dramatically, there has been very high trade volume, indicating potential high profit from even the slightest change. It seems that after a recent SEC operation*, foreign stock exchanges are now preferred. These new pump-and-dump spam messages do not carry random text as content, but consist of copies of complete text found online. So far, content of these messages has been reported in English, German, Dutch and Esperanto. They are parts of newsgroup messages, books that are published online and even software manuals. The actual message has always been in German and did not only appear at the top of the message, but also at the bottom. In combination with the valid and unique text (appears to be crafted for each mail separately), this makes it quite difficult to detect the messages through spam filtering. As listed in a previous diary entry, Bafin** is the German authority responsible for investigating price manipulation."

* http://www.sec.gov/news/press/2007/2007-34.htm

** http://www.bafin.de/beschwerden/verdacht_en.htm

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FYI…

- http://preview.tinyurl.com/3y84hx
October 04, 2007 (Computerworld) – The U.S. Securities and Exchange Commission has suspended trading of the stocks of three companies that haven't provided adequate information about themselves to the public, leaving them susceptible to spam-based stock scams, the agency said. The SEC today suspended trading for Alliance Transcription Services Inc. (ticker symbol: ATSS), Prime Petroleum Group Inc. (PPGU), and T.W. Christian Inc. (TWCI), all traded on the Pink Sheets over-the-counter stock service. The trading suspensions will last 10 days, the SEC said in a statement. The companies were formerly known as Strategy X Inc., Pinnacle Development Inc. and Xraymedia Inc., respectively. Each changed its name Aug. 14, and each purports to have a new business, the SEC said. The companies are susceptible to spam stock promotions because they have inadequately disclosed their assets, business operations or management, their current financial condition, or financing arrangements involving the issuance of the companies' shares, the SEC said. The trading suspensions are part of an antispam initiative the SEC launched in March to target the profit potential for so-called pump-and-dump stock scams. Since then, spam-related complaints to the SEC's online complaint center have dropped significantly. In February, the SEC received nearly 167,000 spam complaints; in September, it received about 68,000 complaints…"

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