New anti-Pump and Dump software developed
"Pump and dump" scams, through which fraudsters use email campaigns to falsely inflate the prices of certain shares, are to be cracked down on through special software.The technology has been developed at Verisign, and allows stockbrokers to track unusual trading patterns, the BBC reports.Pump and dump works through a con artist sending out a mail shot, hyping a certain share - of which he or she already has considerable holdings.Some recipients might then buy the share, causing the price to rise - and the fraudster to then sell them off at a profit.Speaking to the broadcaster, Peter Tancredi at Verisign explained how the software worked."What this self-learning behavioural engine does is look at the different attributes of the event, not necessarily about the computer or where you are logging on from but about the actual transaction, the trade, the amount of the trade," he explained."For example when a customer who normally trades tech stock on Nasdaq all of a sudden trades a penny stock that has to do with health care and is placing a trade four times more than normal." Around 15 per cent of all "spam" email is thought to be related to pump and dump.
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