Stock bashers spread rumors to drive down stock prices, which can be illegal and considered securities fraud. The internet is a fertile ground for this activity, but companies can take legal action and hire security consultants to identify and track attackers.
A stock attacker spreads rumors about a security to drive down the trading price. Bashers may act on their own or represent third parties, and may participate in a coordinated attack with a group of people to make their claims appear more legitimate. People who suggest that a company might be in trouble may not attract attention, but the many rumors that seem to originate from different sources are likely to be taken more seriously. Environments like Internet message boards can be particularly fertile ground for stock thieves.
This activity may be illegal under the laws governing activities in the stock market, according to the regulations. They could be considered a form of securities fraud if bashers operate with the goal of driving down prices to harm a company or create an opportunity for investors. People acting in concert with the stock basher could engage in what is known as a poop and spoon scheme. First, people make negative comments to drive stock prices down, and then they buy the stock when it hits a bottom, selling it once the stock rises again.
The Internet can be great for stock bashers. Message boards and other means allow people to quickly exchange information without verification, although some communities can be policed to keep the quality of the conversation high. Bashers can sign up for new accounts, establish a reputation, and then start claiming that a company is in trouble and that stock prices could fall. They may also appear in comment sections on news articles and other resources to distribute false information.
If a stock pickguard can be identified, action can be taken. In cases where the activity is clearly illegal, information can be provided to authorities to help them apprehend the culprit. Companies victimized by a stock attacker can claim financial damages and can seek court orders to limit the attacker’s activities in the future. For example, they could ask that a person with a stock background be barred from participating in online investor communities.
Some companies hire security consultants and social media experts who watch for signs of attacks and conduct investigations to identify critics. Serial criminals may appear under a number of pseudonyms, which could make it necessary to track by Internet Protocol (IP) address, language used, and other identifiers. It may be possible to carry out actions through a hosting service, since the violation of actions could violate the terms of service, especially if it is defamatory in nature.
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