That’s right kiddos, “Pump and Dump” is used to describe more than the ageless mating practice enjoyed by alpha males. It’s also used to describe a form of Microcap stock fraud. In both scenarios: people are sold a dream, fucked, and then left standing there with sad looks on their faces.
On Sunday afternoon I was helping my cousin and her husband move when her friend walked up talking about a bunch of crazy text messages she had gotten on her cell phone. Being the ex douche bag that I am, I was singled out to explain what was going on. The messages were written to appear as if they had been sent to the wrong person with a juicy (insider?) tip on a penny stock that was about to skyrocket in price. This is the Pump side of a Pump and Dump. Someone looking to manipulate (*cough* *cough* defraud) the market can artificially inflate a stock by as much as tenfold with relative ease. They simply have to get a ton of people to buy the hell out of it within a short period of time.
How the hardcore guys did this back in the day:
1. Buy a metric assload (literal translation: whole bunch) of any random penny stock.
2. Rent some temporary office space with a bunch of phone lines and set up a telemarketing operation.
3. All the cohorts would sit around calling residential numbers during business hours in hopes of getting answering machines. If someone answered: “Whoops, wrong number”. If they got a machine, they’d lay down one of several scripted voice mails that carried the same message: stock XYZ is going to explode on [whatever date].
Example:
“Hey Jim, Bobby again. It’s a Go on XYZ the 19th of this month. I just dropped 50k into that puppy. Our friend at the FDA said that their cholesterol pill is going to get the green light for sure. We’re in the know ahead of the company, even. This is going to be huge.”
4. After leaving thousands upon thousands of these fake insider tips on people’s answering machines the stock would jump up in price because of all the people buying it based on the bogus tips. Before the magical day when the stock is supposed to skyrocket, the evil evil bad bad people sell (dump) all of theirs for big profits before the stock levels out to its actual worth.
5. The people who bought the stock based on bogus insider tips are left with sad looks on their faces and are reluctant to report anything to law enforcement. No one likes admitting to being suckered. And, it was “illegal insider info” they were acting on - not something you want to tell police about.
Think I’m bullshitting about this not being rocket science? About seven years back a freaking 15 year old kid got fined over 250k by the Securities and Exchange Commission for such stuff. Even after that spanking from the SEC, Jonathan Lebed was sitting on 500k in profits from two years of shady stock manipulating.
Back to this current Pump and Dump hustle…
I posted a bulletin on MySpace tonight asking if anyone had gotten any weird / spam-ish looking text messages during this past week. Sure enough, messages and comments poured in reporting “tips” they had gotten about the same stock, FDKE: Fredericks Entertainment.
Some variations of what has been hitting mobile phones like crazy:
- “hi, Lyman Hot stok Movers for tomorrow lookup - fdke This is an easy tripler take care Leon.”
- “truely a HOT stck, t-F+D+K+E, FREDERICKS ENTERTAINMENT see what everyone else knows”
- “jissc New gem of a stck, t-F/D/K/E, FREDERICKS ENTERTAINMENT Once its found it’ll be late ufbwenk”
As you can see, this hustle is a whole lot weaker than the old school answering machine guys I mentioned above. Having to mix in some random text and misspell stock to get past the spam filters of mobile phone carriers doesn’t exactly make this look legit. TONS of people don’t even recognize that garbage as something stock market related. It’s all about mass with this setup though. I imagine those messages have already made it to a couple (several?) hundred thousand mobile phones. So, even though it won’t be 1/1000th as effective as a message on a machine: it’s going out to at least 100 times more people, with ease.
Side notes:
- Yes, I reported this to the SEC via the “tips” email address on their site.
- I imagine they have better safeguards in place to deal with such stuff now.
- I don’t care if those messages make it to a zillion phones. This FDKE pump and dump is sooooo sloppy I doubt the douche(s) behind it will make much. It doesn’t even have a magical date when the stock is supposed to explode.
- If you don’t have unlimited text messages included in your mobile phone plan you should contact your carrier to get credited for any charges incurred over such messages.
- Ninjas are pretty freaking awesome.
Update from the Department of LOLz:
Found a couple of news stories about this from a few days back. The biggest laugh was out of Maine for sure…
“An abbreviated text message on a state mail-delivery truck driver’s official unlisted cell phone had police scrambling for several hours this morning.
Maine Capitol Security Chief Russell Gauvin said the driver received a text message that read ‘Stcks poised to explode, ticker FDKE, Fred.’
…alerted the state Computer Crimes Task Force, which determined after several hours and a subpoena to U.S. Cellular that the message was an advertising message referring to stock trading, not an explosive.”
Source: MaineToday.com
Bhahahhahahhaaaa!!!1
17 brave souls have commented on this post
“Ninjas are pretty freaking awesome”
I smell a pirate brawl a-brewing. Arrr….
*draws a line in the sand*
:P
I remember there was actually a sort of mini-outbreak of this in the UK a while ago. Was on the TV and everything.
This one is getting around in a massive kinda way in the US for sure. Found a couple of LOLz worthy news stories from about a week ago.
Speaking as an AT&T wireless employee, our biggest problem is that most mobiles only have one inbox for SMS. Therefore, before we can filter something as spam, we have to be damn sure it’s spam, otherwise legitimate users don’t get their messages.
I know people hate paying for inbound SMS, but it costs us money to deliver it, so whether you want it or not, we’re gonna charge you.
Calling a carrier to get credit for a couple of text? Let me dispell a few myths, first; There is no way to only be charged for the messages you read. Once you phone goes “beep”, you have been charged. Period. The only way we can stop incoming messages is to turn off all your text functions. If we do that, how are you going to get a text from that person in the bar you played hide the pickle with three weeks ago?
Next: No, your number was not sold to a spammer. Spammers have bulk lists of phone #s that they get from multiple internet sources. Maybe you filled out your cell # on a website, maybe somebody else had that # before you. The phone companies neither know nor care too much how your # got to a spammer. Don’t give us the drama story about how these messages are fraud, or get pissed at us for asking questions about the messages. We care less about the charges on your bill than we do about spammers using our network without paying us. That’s a far bigger cost than your unwanted texts.
Thanks for giving me a topic to rant on, LoLo.
Pirates Rule!!!
Bomb threat huh? That’s amazing…wonder how much THAT in-depth investigation cost the State of Maine!
Yep! I got the stcks explode spam, aqnd I am on cingular/AT&T. It was super weird. I deleted it right away but I remember it had some military address. Instead of making pennys they have a bunch of people going, WTF????
Hey Scott, It’s Nick again. Yeah, I talked to Ugot Skruued over in Russia again and It’s a go on that U.R.A Chump stock, I dropped 23k on it already, this is probably going to be the biggest turnaround in years! Get the deposit slips ready!!!
Oops! Wrong blog…erm, disregard that amazing insider advice that is sure to make you millions.
Whelp, I made some phone calls this morning, in order for me to receive a credit (if I really REALLY want one) I need to send a copy of the 1088 can-spam report form (filled out obviously) to my carrier in order for me to receive a credit.
–Dave.
I dont get those kind of txt msgs. :( I guess I dont hang with the right crowd.
Is this the stock that will also give you the winning English Lottery ticket and enlarge your penis? Count me in.
my message was something like hello jasmine your turn to orgainze the meet, check out bla bla bla. I just figured it was a blurb to sell viagra or some drug that will solve your problems. I prefer Fukitol 1000mg make everything just disappear. :)
Gotta watch that fred. He’ll kill you twelve times before you hit the ground.
In theory, you could also use such strategies to launch a real successful company, providing you had a great idea and all you needed were investors… :)
I thought this was some ad for a new gem that i could use as a lure when go fishing.
I got the same thing, said this ones a gem, quickly called it in for another.
Speak Your Mind