In a long overdue move, the SEC is suspending trading in stocks that are the subject of spam and dump schemes. Hopefully this will reduce the level of stock spam, and of course prevent some gullible people from getting fleeced. The SEC probably should have started doing this as soon as people started publishing studies showing that stock spam actually works.
March 9, 2007 at 11:38 am
I worry that if this isn’t done very carefully, it could just make for a new class of scam. I don’t know enough about trading to say exactly how it would work, but basically, a new attacker would hire a spammer to launch a spam campaign for a stock with the specific goal of getting the SEC to suspend trading on it for ten days. Again, I don’t know exactly how that would be exploited to make money, but it does sound like the beginnings of a way to launch a kind of financial DoS attack.