by Mike Masnick
Tue, Aug 12th 2008 3:49am
A few years ago, there was a study that showed that pump-and-dump stock spam scams actually made money for the scammers. However, what no one has been able to explain is why it isn't easy to track down those responsible. Just find out who bought a bunch of the stock just before the spam went out -- and who sold it all as others started buying up the stock. Sure, it's likely that scammers will try to cover their tracks, somewhat, but it shouldn't be that hard to track down who bought and sold early. In fact, it seems like it would be rather easy. So while we appreciate efforts like this new software that tries to notice such a pump-and-dump in action and alert traders of a potential issue, it's still not clear why this is really an issue at all. It still doesn't explain why we're simply not going after those who made money from the pump-and-dump scam in the first place. And, of course, there's the flip side of the argument: if you're suckered into buying a penny stock based on a spam email, some might say you deserve to lose your money.
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