Criminals are using two basic methods in their bid to manipulate the securities markets for their personal profit. These are the so-called “pump-and-dump” schemes and the “scalping” schemes, both utilizing the Internet as a means to capture the attention and hopefully the money of unsuspecting online investors.

“Pump-and-dump” schemes typically disseminate false and fraudulent information to try to cause dramatic price increases in thinly traded stocks and immediately sell-off stock holdings before the stock price falls back to its usual low level. “Scalping” schemes also disseminate information of the same nature to cause price decreases in a particular company’s stock. Internet technology is almost always used with traditional mass-marketing technology like telemarketing to reach a larger number of potential victims.