Original URL: http://www.theregister.co.uk/2005/12/06/pump_dump/
Hosting firm cuts off VMT Scientific website
Press releases mirrored by hype-spam
A Nevada company's website was suspended by its hosting provider last week after its stock was widely advertised by spam and across weblogs.
Spam fighters are convinced the hyped stock is yet another example of a "pump and dump" scheme, also known as "hype and dump manipulation", where fraudsters buy up stock in a firm, pump up the price then make huge profits by selling their cheaply bought shares back into the market.
Nevada-based firm VMT Scientific claims to have developed a cure for poor circulation arising from diabetes and other illnesses and issued a press release describing its technnology on November 28.
Spam fighters in newsgroups say that one day prior to the news release spammers sent, through an open proxy server in Korea, massive spam promotions touting the stock and declaring VMTF "a clear winner".
On Monday last week the stock, which is traded over the counter, rose 400 per cent.
On the same day, VMT Scientifc's website at www.vmtf.com was suspended by its hosting provider. VMT Scientific quickly moved to a new address, with a domain name registered that day.
According to SEC filings, VMT Scientific itself didn't swing into action until April this year, when a dormant non-medical company Belair Enterprises Inc was taken over.
Last month the revitalised company, which had no previous medical background, suddenly began to promote itself through a dozen or so press releases. Last week, a new release went out almost daily. Even on blogs such as blogspot.com, promotions for the company began to appear, resulting in the closure of the .com site. In a press statement VMT Scientific said its server had been "flooded with emails of interest that have been inspiring to say the least".
Last Friday, another press release went out, this time claiming that "proof of concept testing is expected to be completed by the end of the first quarter 2006". The press release also cites the company's CTO - without naming him. A list of the company's staff was published on the original site, but has disappeared on the new site.
On the new website, potential VMT Scientific investors - while listening to lounge music - can still read the following statement: "How many times have we heard that if we had only bought Microsoft stock when it was a dollar . . . or a little company called Apple when it first hit the market? Well, here's a chance to be on the winning side of those rhetorical "what if" stories."
No one was available for comment at the company last week. Emails remained unanswered. As of yesterday, the company's phone number disappeared from the website. The office in Henderson, Nevada is a shared office suite, where law firms and mortgage lenders are based, a phone operator told The Register. ®