By Robert McMillan
IDG News Service
October 20, 2010
A Chandler, Ariz., man has pleaded guilty to charges related to his role
in a pump-and-dump scam that inflated penny stock prices via spam and
James Bragg, 41, faces five years in prison and a $250,000 fine for
orchestrating the hacking and spamming portions of the scheme, which ran
between November 2007 and February 2009, according to prosecutors. He
pleaded guilty Wednesday in U.S. District Court for the District of New
Bragg used a Russian botnet operator, named only as B.T. in court
documents, to send the spam and to access hacked brokerage accounts and
buy the penny stocks without the victim's knowledge.
The case sheds some light into the murky world of penny stock
manipulation, where companies hire shady promoters to boost their stock
prices. The promoters appear to be legitimate marketing and public
relations firms, but some of them use illegal practices such as spamming
to achieve results.
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