Stock Market Scam

Using technology to manipulate the value of stocks may be easier than apparent.  ABC World News had a report that companies were placing errant phone messages designed at duping investors into thinking that they are receiving a hot insider stock tip designed for someone else ears.  The hope is the unsuspecting investor will act on the tip anyways, artificially inflating the value of the stock.

Douglas Rushkoff outlines an on line chatroom scenario that is similar in his book Exit Strategy.  What if investors were using inter net chat rooms to inflate or devalue stocks by convincing investors to buy or sell at their will?  More at Community Mobilization.

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  1. i think some company stakeholders DO get on the Yahoo! Finance or Motley Fool boards (for example) and try to start rumors about their companies or their competitors that will affect the stock price. And as long as these stakeholders are not actually lying (pretending to be someone they’re not or overtly revealing insider information, say), i don’t think this practice should necessarily be illegal.

    i understand that there are spam email messages now that do the same thing as the phone calls you describe. That seems a bit different than the bulletin boards, because the user – the phone call or email recipient, i mean – isn’t actively seeking the information. “Buyer beware” applies in each case, but there’s an invasion of privacy with the phone calls or emails, unlike with the boards.