Latest News

latest

WhatsApp Used as a Conduit for Stock Fraud

valeindependente.wordpress.com

If you've seen The Wolf of Wall Street, or just know the story of Jordan Belfort, you'll know that a lot of his success was built around the purchase and sale of penny stocks, or pink sheets. These are stocks for small time companies which sell at very very low rates, sometimes as little as 1 cent per share. The other key difference is that brokers make a far larger commission from these than from more valuable stocks, which is why the 'pump and dump' scheme came into being.

What it essentially entails is talking up a particular stock so vehemently that interest rates start to climb, shares fly off the shelf, and then the broker gets the hell out of there before everyone realises that it was all nonsense. You would think that since the collapse of Stratton Oakmont (Belfort's company/boiler room) and subsequent tightening of fraud laws, pumping and dumping would have quietly died out, but it's still very much alive, and social media is its new stomping ground.

Last week we reported on the increasing number of pump and dump cases appearing on Twitter, but last Friday reporters noticed that it had made the transition to somewhere a bit more unexpected - WhatsApp. It's more of a messaging service than a true social media platform, which makes the idea of trying to scam people on it all the more ridiculous, and yet. People using the app started getting messages informing them that the share price of a digital currency firm called AVRN was going up and that they might want to think about buying.


The wording of the message is almost disturbingly informal and familiar, as if it's from some stock market insider that you've actually had some previous contact with. Clearly it fooled some people, because at around 11am EDT on Friday AVRN stock spiked, violently. WhatsApp tends to have a pretty good spam filter, so coupled with the outlandishness of the approach, it's easy to understand how some people fell into the trap.

It's obviously more of a spray-and-pray DIY scheme than actual, targeted spam, as the people who got the message were lumped into groups of 100 (the maximum WhatsApp allows) and messaged one group at a time. However much it actually paid off, it will probably never work again, forcing stock manipulators to either gravitate away from social media, or come up with something even more cunning. It will probably be the second one. People who misrepresent information for financial gain have always made a point of staying up on the most current trends, so this was sort of always going to happen, but if future scams are going to have timelines as short as this one, we might start seeing more of them and more frequently.


Callum Davies

Callum is a film school graduate who is now making a name for himself as a journalist and content writer. His vices include flat whites and 90s hip-hop. Follow him @CallumAtSMF

Contact us on Twitter, on Facebook, or leave your comments below. To find out about social media training or management why not take a look at our website for more info http://socialmediacambridge.co.uk/.
WhatsApp Used as a Conduit for Stock Fraud Reviewed by Callum Davies on Monday, August 24, 2015 Rating: 5
All Rights Reserved by Social Songbird © 2012 - 2018
Powered By Blogger

Contact Form

Name

Email *

Message *

Powered by Blogger.