Penny Stock Scams & Manipulation Alive and Well, Unfortunately

Penny stock scams have been around for many years, and are still going strong as is evident with SWRM in the past 24 hours.  The concept behind this type of fraud is to buy large quantities of a worthless stock, then inflate the market through emails and other media prompting people to buy it (get rich quick type motive).  When the stock goes up the adversary sells shares for a profit, plummeting the stock value after all rumors are dispelled and a massive amount of stock is sold.  All the get rich wanna be’s lose their shorts in this get rich quick scheme while adversaries make massive amounts to scale globally.

4D5A Security has seen several communications in the past 24 hours promoting Appswarm stock with ticker SWRM, a mobile games developer.  The media received claims that King  (makers of Candy Crush) may buy it before Christmas.  Right now the stock is at $.011 which is pretty cheap, no harm in buying it right?  Look at the numbers since this eCrime spam has gone out,  It was formerly at $0.0108 per share.  While the difference is small on such a small valued stock anyway, if you a lot of shares and then get others to buy the stock in hopes of a Christmas bonus for themselves, a hefty profit can be obtained.  Let’s do the math…if you bought 100,000 shares a few days at a $.0061 that would have cost you $610 USD.  If eCrime spam and rumors of a buy/increase in stock value are successful (and they are, see the graph) the stock may rise up to say $.0200, where it was a few times in the past month.  That’s a difference of $.0139.  At 100,000 shares, or a measly $610 worth of investment, you yield $1,390.  When you automate and scale and do this to thousands of stocks, and buy mass quantities across the board, and/or manipulate in different regions and then dump your stock for a profit, you’ll make six figures if not millions.

This is an old style of eCrime from a long time ago.  I honestly can’t even remember when I first broke the story on this type of crime around the turn of the century but it was a very large business at the time.  It’s sad to see inherent trust of email and Internet media manipulate others.  This is no time to be naive!  Simple rule – if you don’t know and trust the sender don’t trust it.  And related to get rich quick schemes…work hard, have integrity, and treat others like how you’d like to be treated.  If it’s too good to be true it probably is!