Experts: Pump & dump scams target European companies

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Experts: Pump & dump scams target European companies

Fraudsters are targeting European companies in "pump and dump" scams for the first time, according to security firm Sophos.

Hackers are believed to be buying stocks at a cheap price and then spamming messages with bogus investment advice to German shareholders in an attempt to persuade them to purchase more stocks in order to boost the value of the criminal's shares.

The spammers campaign is designed to manipulate the share price of a company listed on the German stock exchange – the first time this type of scam has been attempted on a corporation listed outside the US, experts at Sophos claim.

"If spammers are finding this stock's price easy to manipulate it could leave German computer users seriously out of pocket,” said Graham Cluley, senior technology consultant for Sophos.

"With pump and dump, there's a real danger that armchair traders may be fooled into investing in such firms for false reasons. It will be interesting to see if stock scammers, who have plagued US-listed penny stocks for some time, will now turn more of their attention to overseas markets."

Sophos's latest report revealed that pump and dump stock brokerage scams accounted for around 25 per cent of all spam last year, up 0.8 per cent from January 2005.
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