Stock Spam Getting Too Crowded: Latest Trick Is Advertising Your Stock In Respected Financial Publications

from the competition-is-getting-tough dept

Stock spam has become even more popular over the last year or so, as there’s increasing evidence that it works for the spammers as an easy way to get money. However, with so much spam, it appears that some need to figure out other ways to pump up their stock — and may be using ads in respected financial publications to do so. Davis Freeberg writes "Normally, if I received a piece of stock spam, I’d just delete the message and move on, but last week I got a piece of stock spam in my mailbox instead of my inbox. The company in the letter was named Ghuangzhou Global Telecom. They recently went public in a reverse merger. Through the use of complex financial engineering, the company’s founder, has gone from an initial $100 investment to $7.6 million, based upon Friday’s closing price. What makes this story so surreal is how Ghuangzhou is getting their publicity. Instead of sending out mass email spams, they are targeting financial people with mailers and have been advertising in Business Week, Forbes and Investor Business Daily. Kiplinger’s appears to be the only major publication to reject the ads, and has already spoken out about the ads — but the rest of the mainstream media seems to content to ignore the issue, as long as they are getting ad revenue from the promoters." Freeberg also takes a closer look at the company. It does seem problematic that respected financial publications seem to be giving the tacit okay to a questionable stock. Also, not mentioned in the article, but it certainly sounds like these ads may violate SEC rules for promoting a stock.

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Comments on “Stock Spam Getting Too Crowded: Latest Trick Is Advertising Your Stock In Respected Financial Publications”

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ehrichweiss says:

one way

One way to fix this would be to freeze all trading on stock that is being spammed for a given length of time seeing as how it surely enters into the realm of securities fraud BUT I don’t see it happening since someone will get the idea to spam legit stock so they could cash in.

That being said, if a stock is being spammed then it should at least be given as an alert to all traders(especially day traders) to warn that the stock could be worthless.

DML says:

What's funny is that these guy are not "respected"

And yet Forbes, Business Week, et. al. routinely interview CEOs who lie to the American public about how influential their companies are or how great they’re performing.

If you want to see more examples of over hyped stocks and dubious claims of influence, don’t stop at Ghuangzhou – just take a look down the S&P 500 and pick one.

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