E-mail spam inflates value
Pink Sheets' signs rank risky stocks
August 3, 2007
BY SUSAN TOMPOR
DETROIT FREE PRESS
Skull and crossbones are a trendy fashion statement this fall for sneakers or scarfs. Not so for stocks.
Beginning this week, investors may spot the skull and crossbones sign as a warning posted next to some specific stocks on the Pink Sheets Web site, which lists over-the-counter securities. The message is: Don't buy these stocks, instead run for cover.
"These are complete pirates. They're the worst of the worst. They're just bad people," said Cromwell Coulson, chairman and chief executive officer of Pink Sheets LLC, a privately owned New York company that publishes price quotes for thinly traded stocks on the over-the-counter market.
E-mail spam inflates value
Some risky markets are getting far more risky, as stock manipulators use e-mail, faxes and other means to snag a few suckers.
The Securities and Exchange Commission noted that it's hard to pinpoint how much money investors are losing to spam e-mail and Web site fraud. But estimates range in the hundreds of millions of dollars.
The SEC has noted that some research has been done that connects some short-term jumps in stock prices for these thinly traded stocks to the dissemination of spam.
The scam can involve a pump-and-dump scheme. A stock manipulator buys some low-priced shares in a pretty much worthless stock. Then, the con artist floods e-mail baskets with hot tips about that same stock as a way to pump up the stock price. As a few gullible investors buy the stock, and the price goes up quickly.
The con artist then sells the shares at the inflated price -- and the everyday investors are left on the sidelines to watch the price of their stock tumble.
Stop at site before investing
Companies that do not provide adequate disclosure about the business now have a "stop" sign as a warning to investors at www.pinksheets.com.
And stocks that are the subject of spamming or promotional stock activity get the skull and crossbones.
Companies with limited financial information would receive a "yield."
Some names that will get the skull and crossbones include Global Developments Inc. -- ticker symbol GDVM.PK -- and Bell Buckle Holdings Inc. -- ticker symbol BLLB.PK. Spammers have touted both stocks.
Management of both companies say they are not involved in promoting their stocks by e-mail.
"It has become easier to tap investor greed if you are a manipulator," Coulson said.
So avoid all hot stock tips that you get via spam e-mail.
But if you're really tempted, do more research by going to www.pinksheets.com or the SEC Web site at www.sec.gov.
Some legitimate, distressed companies, including Delphi Corp., are listed on Pink Sheets. Pink Sheets also is offering a grouping -- the International OTCQX -- to highlight the highest quality international companies, such as Wal-Mart de Mexico.
In general, stocks on the Pink Sheets are speculative investments.
But you do not want to shop for any stock that has the skull and crossbones. Trendy or not.
Pink Sheets' signs rank risky stocks
August 3, 2007
BY SUSAN TOMPOR
DETROIT FREE PRESS
Skull and crossbones are a trendy fashion statement this fall for sneakers or scarfs. Not so for stocks.
Beginning this week, investors may spot the skull and crossbones sign as a warning posted next to some specific stocks on the Pink Sheets Web site, which lists over-the-counter securities. The message is: Don't buy these stocks, instead run for cover.
"These are complete pirates. They're the worst of the worst. They're just bad people," said Cromwell Coulson, chairman and chief executive officer of Pink Sheets LLC, a privately owned New York company that publishes price quotes for thinly traded stocks on the over-the-counter market.
E-mail spam inflates value
Some risky markets are getting far more risky, as stock manipulators use e-mail, faxes and other means to snag a few suckers.
The Securities and Exchange Commission noted that it's hard to pinpoint how much money investors are losing to spam e-mail and Web site fraud. But estimates range in the hundreds of millions of dollars.
The SEC has noted that some research has been done that connects some short-term jumps in stock prices for these thinly traded stocks to the dissemination of spam.
The scam can involve a pump-and-dump scheme. A stock manipulator buys some low-priced shares in a pretty much worthless stock. Then, the con artist floods e-mail baskets with hot tips about that same stock as a way to pump up the stock price. As a few gullible investors buy the stock, and the price goes up quickly.
The con artist then sells the shares at the inflated price -- and the everyday investors are left on the sidelines to watch the price of their stock tumble.
Stop at site before investing
Companies that do not provide adequate disclosure about the business now have a "stop" sign as a warning to investors at www.pinksheets.com.
And stocks that are the subject of spamming or promotional stock activity get the skull and crossbones.
Companies with limited financial information would receive a "yield."
Some names that will get the skull and crossbones include Global Developments Inc. -- ticker symbol GDVM.PK -- and Bell Buckle Holdings Inc. -- ticker symbol BLLB.PK. Spammers have touted both stocks.
Management of both companies say they are not involved in promoting their stocks by e-mail.
"It has become easier to tap investor greed if you are a manipulator," Coulson said.
So avoid all hot stock tips that you get via spam e-mail.
But if you're really tempted, do more research by going to www.pinksheets.com or the SEC Web site at www.sec.gov.
Some legitimate, distressed companies, including Delphi Corp., are listed on Pink Sheets. Pink Sheets also is offering a grouping -- the International OTCQX -- to highlight the highest quality international companies, such as Wal-Mart de Mexico.
In general, stocks on the Pink Sheets are speculative investments.
But you do not want to shop for any stock that has the skull and crossbones. Trendy or not.