NY Man Facing Charges in Pump and Dump Stock Spam Scheme

A New York stockbroker was indicted in Detroit on conspiracy charges for allegedly selling stock which had been pushed via a spam campaign run by infamous “Spam King” Alan Ralsky’s  pump and dump scheme.

Authorities say Gregg Berger of Yonkers, N.Y. raked in over $600,000 in commissions acting as the scammer’s stockbroker. He sold over 30 million ultimately worthless Chinese and Israeli stocks. Ralsky and his cohorts netted millions through the scheme, which ran from 2005 to 2007.

Pump and dump schemes work by sending out spam messages which attempt to convince the recipients that the stock they are hawking is hot and that they should invest right away to insure huge profits. The sales these fraudulent claims generate artificially inflates the price of the stock, allowing the scammers behind the scheme to cash in, make a large profit, and disappear. The stock then plummets and the investors who fell for the scam are left with nothing.

“Pump-and-dump schemes undermine the integrity of our stock markets,” Assistant Attorney General Lanny Breuer said in a statement. “When stock brokers exploit their trusted positions to enrich themselves at the expense of innocent investors, as Mr. Berger is charged with doing here, we will pursue them vigorously.”

The SEC has also filed fraud charges against Berger and 10 others, including 3 companies. Ralsky was sentenced to over 4 years in prison in 2009. If convicted Berger faces up to 25 years in prison and a stiff fine. He’s due to be arraigned on February 18^th.