Pump-and-dump stock spammers have moved from the US stock exchanges to European bourses, with a campaign coming to light yesterday designed to manipulate the share price of a company listed on the German stock exchange.
US-based energy company Stonebridge Resources Exploration Ltd announced its listing on the Frankfurt Stock Exchange on 1 March 2007 under the ticker symbol S3C.
Yesterday, SophosLabs experts identified an active spam campaign encouraging German investors to buy shares in the company.
The scam, known as a "pump-and-dump", works by spammers purchasing stock at a cheap price and then artificially inflating its price by encouraging others to purchase more (often by spamming "good news" or "investment tips" about the company to others). The spammers then sell off their stock at a profit.
Trading in the stock soared as the spam campaign was distributed via email.
"This is the first time we have seen a widespread spam campaign trying to influence a stock market based outside of the US, and German language users may be at risk of losing money," says Graham Cluley, senior technology consultant for Sophos.
"We saw the price of this stock rise immediately after we intercepted the spam campaign, and there is a danger that some people may be fooled into investing in this firm for bogus reasons. It will be interesting to see if stock scammers, who have plagued North American-listed penny stocks for some time, will now turn more of their attention to European markets."