Investor Watch: Stock spammers moving to social networks

 

Have you noticed there is less stock spam landing in your e-mail inbox these days? If you answered “yes”, then you are not alone.

 

Symantec, an online security company, released a study in July that showed e-mail spam volume declined 13 per cent in 2011 from 2010 levels.

 

Company spokespeople from various online security companies echoed Symantec’s findings in a Globe and Mail article, saying they have also seen e-mail spam levels dropping.

 

Where is e-mail spam ending up today? 

 

According to an independent tech analyst quoted in the Globe article, instead of blasting people’s e-mail, spammers are taking to social networks to get their messages out. His assessment is backed up by another anti-spam software executive in a Bloomberg Businessweek article who says spammers create about 40% of social media accounts, and 8% of the messages sent via social pages.

 

Better spam filters, better awareness around e-mail scams, and the fact people now spend a lot of time on social networks, are some of the possible reasons there is a shift away from this type of activity. Furthermore, the ease of sharing content through social networks gives stock promoters and scam artists the ability to rapidly expand their audience through trusted sources (friends, followers, etc.).

 

This is not to say that e-mail scams or illicit stock promotions are yesterday’s news. Scam artists and shady promoters will use any tool available to get at your money. For this reason, we continue to review e-mail spam, looking into any promotions that involve B.C.-based companies.

 

How can you avoid falling for a stock promotion on social networks? 

Here are some things to watch out for when using social networks, such as Twitter, Facebook, LinkedIn or YouTube:  

  • Watch out for overly promotional language that suggests a stock is the “next big thing” or “it is going to the top of the charts”.
  • If someone is talking about an investment in your social circle, check to see if it exhibits one or more of the Fraud Warning Signs.
  • Be sceptical of people or companies promising hot stock or investment tips through direct messages or posts to social media networks.
  • Watch out for multiple posts that are the same or similar which are published and republished within minutes of one another.
  • Do not respond to direct messages about investments or stocks that come to you via social networks or text message.
  • Search the social network for symbols, names, or hashtags to see if there is an increase in the volume of conversation around a stock or an investment opportunity.
  • Check a company’s public disclosure to be sure they are not sharing illegal inside information on their social network pages.
  • Do not repost, retweet, or help promote an investment that exhibits one or more of the Fraud Warning Signs.
  • Do not repost, retweet, or redistribute a post about a stock that people or companies are heavily promoting on social networks or the Internet.
  • Remove companies or individuals who aggressively promote investments from your social networks. Report them, if you think their conduct is illegal.
  • Report any investment-related activity you think is overly promotional or illegal.

How do you report illegal investment activity? 

 

If you have been approached by someone that you suspect is illegally selling investments on a social network, or you are aware of an investment that may be a scam, contact your provincial securities regulator immediately.

 

In BC, contact BCSC Inquiries via e-mail or phone at 604-899-6854 or 1-800-373-6393. You can also anonymously report suspicious activity through InvestRight’s Report a scam webpage.

 

Residents from other Canadian provinces can find contact information for their provincial securities regulator at www.securities-administrators.ca