US punters warned of 'pump and dump' phone scam
Hot share tip hits answerphones
Punters in the US are being warned not to be hoodwinked by a dodgy answerphone message that's sweeping the nation.
The "breezy, intimate messages" sound as if a woman caller believes she has mistakenly dialled a girlfriend and is confiding inside information she has learned from "that hot stock exchange guy I'm dating". The scam message goes on to say that the stock price of certain small, thinly traded companies will soon shoot up.
The Securities and Exchange Commission (SEC) has received hundreds of complaints from investors who've been conned by the voicemails. Regulators believe these messages are part of a "pump and dump" stock manipulation scheme, with those behind them chahsing in by driving up the price of their targeted stocks, then selling, and leaving victims with losses.
Says the message: "Hey Tracy, it's Debbie. I couldn't find your old number and Tammy says this is the new one. I hope it's the right one. Anyway, remember that hot stock exchange guy that I'm dating? He gave my father that stock tip on the company that went from under a buck to like three bucks in two weeks and you were mad I didn't call you? Well I'm calling you now! This new company is supposed to be like the next really hot clothing thing. And they're making some big news announcement this week. The stock symbol is ... He says buy now. It's at like 50 cents and it's going up to like 5 or 6 bucks this week so get as much as you can. Call me on my cell, I'm still in Orlando. My Dad and I are buying a bunch tomorrow and I already called Kelly and Ron too. Anyway I miss you, give me a call. Bye."
If enough gullible investors fall for this scam the price of the stock rises ("pump"). And once the fraudsters sell their shares ("dump") and stop hyping the stock, the price invariably falls and investors lose their money.
"Investors should never buy stocks on the basis of 'hot' tips from strangers," said SEC official Susan Wyderko. "We are concerned because the stock prices of companies mentioned in these calls have gone up, presumably as people listen to the messages and buy. But in all 'pump and dump' schemes, as soon as the promoter stops touting a stock, the price plummets and other investors lose their money." ®