Oh dear, Over on the cyberlaw site at Harvard I came across a paper I’d seen before but not actually read. I read it last night. Spam Works: Evidence from Stock Touts and Corresponding Market Activity. by Frieder and Zittrain. Read it. It is scary stuff. Here is a quote….
We match price and volume data from Pink Sheets, LLC to ticker symbols that appear in email touts received by one of the authors and by the Internet Usenet newsgroup net.admin.network.abuse.sightings (“NANAS”) between January 2004 and July 2005, and compare the presence and volume of spam that touts particular stocks with the price and volume behavior of those stocks before, during, and after the touts.
We find a significantly positive return on a day of heavy spam touting of a stock, along with the day preceding our detection of such touting. Volume also responds positively and significantly to heavy touting. Returns in the days following touting are significantly negative. Though we have no way of directly knowing if the spammer actually has holdings in the spammed stock apart from the spammer’s own admission, when it appears, and the surmise that some pecuniary motive inspires sending the spam, the evidence accords with a hypothesis that spammers tout stocks in order to increase trading activity and price enough to unload their positions at a profit. Selling pressure on the part of the spammer then results in negative returns following heavy touting.
Does this worry anyone else? Bill Gates reckoned he would have the SPAM problem fixed by now, but we are absolutely miles from any kind of resolution. SPAM filters are not the cure, they are band-aids applied to a bullet wound. The Internet is not all huggy huggy web2.0 goodness and freedom. Surely the SEC and others should go after these folks?
Check out the Spamhaus site for more details on the extent of the spam problem. Neither existing laws nor the current Internet governance seem to be workin. Spamhaus noted in 2003 that
As an international organization, but one which is based in the United Kingdom where the sending of Unsolicited Bulk Email is now illegal, Spamhaus sees the introduction of the CAN-SPAM Act of 2003 (S.877/HR 2214) as a serious failure of the United States government to understand the Spam problem.
3 years later it would seem that they were right. I do find it rather odd that the organisation leading the fight against spam is a 25 person non-for-profit organisation. The UK government won’t fund them, and they rely on donations to keep operating.
The spamming software is getting more sophisicated.
“Although we’ve seen automated spam networks set up by malware before…this is one of the more sophisticated efforts. The complexity and scope of the project rivals some commercial software. Clearly the spammers have made quite an investment in infrastructure in order to maintain their level of income,” the advisory concludes.
Geeklawyer led me to a case in the UK and the US relating to spamming . This has all the making of a Rumpole episode. Details here and here I think. Zoli suggested an approach to deal with some of the spam you get. In addition to Zoli’s point, stick the FTC on cc. According to the FTC website.
If you get spam email that you think is deceptive, forward it to firstname.lastname@example.org. The FTC uses the spam stored in this database to pursue law enforcement actions against people who send deceptive email.