LinkedIn spam leads to pump-and-dump stock scam

Filed Under: Featured, Social networks, Spam

LinkedInWe used to see a lot of pump-and-dump stock spam.

Pump-and-dump stock manipulation works like this:

  • Spammers purchase stock in companies trading at very low levels, at a cheap price
  • The spammers artificially inflate the stock's price by encouraging others to purchase more (often by spamming "good news" about the company to others).
  • They then sell off their stock at a profit, often causing the stock price to slump for those who made the mistake of investing.

Global recession, jail sentences, and tighter regulation by the SEC seemed to largely kill off stock spam a few years ago.

So, we were interested when Naked Security reader Ivan forwarded us an unsolicited email he received, claiming to come from a user of LinkedIn:

LinkedIn spam email

Catarina Meadows requested to add you as a connection on LinkedIn:

Ivan,

You have to see this presentation I made you about a company that investors are making lots of money on.

[LINK]

Let me know what you think

Regards,
Catarina

Ivan was correct to smell a rat. If you click on the link you are taken - via a Bit.ly url shortener - to a YouTube video promoting stock in a company called Neologic Animation Inc (trading as NANI), which appears to make Flash-based educational software primarily targeted at the Chinese market.

Neologic Animation website

NANI is not a heavily traded stock, with shares currently selling for approximately 10 cents each.

The spammed-out video, which was posted on YouTube earlier this month and has already received over 25,000 views, tries to convince you that Neologic Animation is a company going places, and appears to suggest that investment would be a good idea.

However, make sure you read the disclaimer at the end of the video's sale pitch..

Disclaimer

Currently the publisher of this marketing piece expects to be compensated $5,000.00 (Five Thousand United States Dollars) from an unaffiliated third party for this NANI advertising and promotion.

One wonders why an unaffiliated third party might be promoting the Neologic Animation stock so aggressively? What could be their motivation for spamming LinkedIn users (judging from the comments on the video, other LinkedIn users have also received the links)?

Is it possible someone is trying to pump up the stock price of NANI? That seems the most likely explanation to me.

Oh, and by the way, I haven't managed to find anyone called Catarina Meadows on LinkedIn.

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6 Responses to LinkedIn spam leads to pump-and-dump stock scam

  1. Phil R · 804 days ago

    Is it petty to notice that "Education China One Child At A Time" is a sign that the creators of the webpage don't actually have that great an education? Or at least they don't have good copy-checking. "Educating China" seems like what they were trying to say and an autocorrect might make the short hop to "Education" but it's a sign the site isn't as investment-worthy as you might think

    • DDD · 804 days ago

      There was heaps of spelling errors through the video.

      Also the name the Guy gives at the end (Paul Kincaid) is different to the account name (Michael Coin) and at the start he talks about a previous pick, but there is only the one video on the account?

  2. edent · 804 days ago

    Amazingly, 736 people clicked on that link - http://bitly.com/L1KEEV+

    There really is one born every minute.

    • VFAC · 803 days ago

      Is that enough to make this scam worthwhile i.e. did it affect the stock price?

  3. Jeff · 803 days ago

    Yes, the stock price is up to $.14 per share today.....if you can identify a 'pump and dump' at the right time, (and sell at the right time!), you can make reasonable profits...

  4. Deborah · 802 days ago

    I too got this email from a Paul...no last name. Sadly, I doubt that I would ever invest in anything based on improvement in China because some people there have gotten quite good at using America names to do scams.
    I also regularly get men trying to court me. In the end it usually results in a request for money. The last one claimed to have equipment held hostage in Nigeria and needed $70,000 to bail it out.
    Dream on.

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About the author

Graham Cluley runs his own award-winning computer security blog, and is a veteran of the anti-virus industry having worked for a number of security companies since the early 1990s. Now an independent security analyst, he regularly makes media appearances and gives computer security presentations. Send Graham an email, subscribe to his updates on Facebook, follow him on Twitter and App.net, and circle him on Google Plus for regular updates.