Couple Orchestrating Pump-and-Dump Scam puts SEC in Trouble

According to the security researchers, couples are currently working as a team to execute Internet scams. In an ongoing investigation, the focus is on a couple, Jeffery Stone, and Janette Diller Stone, his wife. Both are attempting very hard to free themselves of accusations from the U.S. SEC (Securities Exchange and Commission), which charged the couple of executing a pump-and-dump spam scam.

The researchers explained that "Pump-and-dump" spam scam is a practice wherein the spammers attempt to falsely lift up the price of shares of a particular company. While these scams were very popular all through 2007 and early 2008, their importance subsided enormously beyond that period.

Meanwhile, according to the SEC, Mr. and Mrs. Stone masterminded a scheme in which they artificially pumped up the stocks belonging to WebSky Inc., a penny stock enterprise based in San Francisco, via spam e-mails. The commission claims that the Stones purchased 288 Million shares from WebSky through fake pledges that they were buying them as an investment.

Very soon, the couple started to sell off the acquired stocks to intermediary parties. Simultaneously, they distributed spam e-mails falsely stating that WebSky was successfully doing business jointly with a company in Argentina to reap around $40 Million annually.

In fact, WebSky actually was merely a start-up enterprise without any earnings.

Moreover, as the bogus campaign for WebSky's stocks circulated, the same stocks soared 300%, while the Stones accumulated over $1Million through the sale of their shares.

Paradoxically, the Stones feel no fear of SEC's investigations against them. They even appear reluctant to help the commission.

Jeffery Stone said that he'd never pay the SEC, which earned a civil verdict opposed to him and Janette during January 2009, as reported by Reuters.com during the second week of April 2010.

Commenting on Internet scams executed by the couples like Stone and his spouse, Professor Michael Benson of the University Of Cincinnati School Of Criminal Justice stated that it is not at all difficult to spot a man and treat him with suspicion. However, if the wife of that person is also involved, then that'd be quite reinsuring for some individuals, as reported by Dealbreaker.com during the third week of April 2010.

Related article: Couple in Malaysia First to be Charged for Online Investment Scam

» SPAMfighter News - 5/1/2010