A recent movie hit from Hollywood provides an insight into a scam that still operates prolifically across cyberspace.
If you’re one of the many to have already watched the movie “The Wolf of Wall Street” then you’ll already have been given their “Hollywood-ized” account of dodgy, boiler room investment tips.
The story tells the real-life (albeit with artistic license) story of Jordan Belfort, a stockbroker that used high pressure, get-rich-quick sales tactics towards potential investors in order to commit securities fraud, resulting in the significant losses of his investors and financial gain for Belfort achieved through commissions and through stock manipulation.
The movie is based on real life events, and whilst was set over a decade ago, similar securities fraud still exists today. And anyone on the Internet can potentially be a victim.
Only it won’t be a cold call from someone like Jordan Belfort that initialises the scam, rather an unsolicited email from a so-called penny stock market broker offering you advice and tips to becoming super rich.
Penny stock spam email is a popular type of junk email, and much like a method depicted in the “The Wolf of Wall Street” movie, these scams often use the “Pump & Dump” scheme which involves a securities fraud scammer purchasing cheap stock in a particular company and then misleading investors and providing hype about that companies stock in order to induce a high number of investments and thus artificially increase the price of the stock.
And then at some turning point the scammer will sell their stock, which will usually be significant enough to start sending the price of the stock crashing down and thus losing the money of the people still invested in it.
These scams rely on the investor not adequately understanding the market or financial trends well enough to be able to make their own informed decisions, thus allowing a scammer to exploit their lack of knowledge for their own financial gain.
So the bottom line is to never trust strangers with important investing information, whether it is Julian Belfort or some penny stock broker whose email you just found in the junk folder. Who said Hollywood could never teach us a thing or two about staying safe online?
