Stock spam: Those too-good-to-be-true deals are
Q: I get 20 e-mails a day pitching some penny stock supposedly set to go through the roof. How do the people sending these e-mails make money?
This stock spam comes in many flavors. Some claim a company is about to announce big news that will send shares rocketing. Others masquerade as private e-mails between a broker and a client, and due to your good fortune, accidentally sent to you. Others appear to be legitimate research by Wall Street analysts.
They're all scams. They almost always are thinly veiled "pump and dump" schemes.
Here's how these spammers hope to profit: They find a small, thinly traded stock with an interesting company name or in an industry investors can get excited about. Think Internet. Think ethanol. Think wind farms.
It's even better if the stock trades on the Pink Sheets, because then there's no requirement to file audited financial statement...
» USA Today - Matt Krantz - 02-10-2006