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Press Release |
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VeriSign Protects Against ‘Pump and Dump’ in Real-Time
VeriSign Enhances the VeriSign® Identity Protection Fraud Detection
Service to Keep Online Traders from Falling for Stock Manipulation Schemes
London – August 11, 2008 – Perpetrators of “pump and dump”
stock manipulation schemes are facing new barriers, thanks to new protection
from stock trading fraud. The safeguard was unveiled today by VeriSign,
Inc. (NASDAQ: VRSN), the trusted provider of Internet infrastructure
services for the networked world.
Aimed at organisations looking to minimise the costs
and negative fall-out from fraud, the VeriSign® Identity Protection
(VIP) Fraud Detection Service Stock Trading Module is the first of its
kind to protect traders at the transaction level, tracking behaviour
specific to stock trading scams. The module uses the VIP
Fraud Detection Service’s self-learning behavioural engine
to spot pump and dump activity by tracking and weighing multiple factors
including stock risk, user behaviors, how trading compares to typical
fraudulent trades, and the network effect that occurs when many users
are making similar trades.
The VIP Fraud Detection Service Stock Trading Module
will help prevent losses attributed to stock manipulation schemes that
artificially hype the price of a thinly-traded stock or penny stock.
One type of scheme dupes legitimate traders into buying such a stock
on rumor. Another scheme involves the takeover of user accounts and
purchases penny stock in large quantities. In both cases, when the stock
price rises, fraudsters quickly dump their shares, collecting gains
for themselves and causing investors and brokerages to lose money.
To demonstrate the losses attributed to pump and dump
schemes, in June 2008, Dow Jones Newswires reported that a particular
pump and dump scheme involving stock from GTX Global netted more than
$31 million in profits1. And in the fall of 2007, Kiplingers.com reported
that pump and dump schemes from spam campaigns alone cost investors
billions of dollars a year, according to SEC estimates2.
“New stock frauds are far more sophisticated than
the ‘traditional pump and dump’ scams,” said Chris Christiansen, program
vice president, Security Products and Services at IDC. “The attacks
enable criminals to fraudulently pump up an unknown stock's price via unauthorised
purchases from co-opted accounts. VeriSign offers a unique service that
protects traders at the transaction level and customer’s accounts from
being compromised.”
Because VeriSign can detect the fraud while it’s taking
place, traders and brokerages are protected from potentially huge losses.
Until now, brokerages had to rely on counter measures including restrictive
stock trading or solutions that only alert brokerages after trading
has taken place and the money is already gone.
“Fraud isn’t just a cost of doing business, it also
undermines consumer confidence,” said Fran Rosch, vice president of
Identity and Authentication Services at VeriSign. “With the new Stock
Trading Module, we extended the existing functionality of our VIP Fraud
Detection Service to proactively identify fraud before damage can be
done. Preventing pump and dump types of schemes makes a huge difference,
and it’s one only VeriSign can provide.”
For information about the new VIP Fraud Detection
Service Stock Trading Module, visit www.verisign.com/stocktrading
or see information in flash form at www.verisign.com/stockdemo
1 June 26, 2008; Carol S. Remond, Dow Jones Newswires.
“Government Indicts Stock Touts Kos, Hagen for Fraud, Money Launder” http://www.11.predictwallstreet.com/news/default.aspx?storyID=74605862&symbol=AHFI
2October 10, 2007; Thomas Anderson, Kiplinger.com.
“Stock-Scam Crackdown: Too Little, Too Late?”
http://www.kiplinger.com/columns/picks/archive/2007/pick1010.htm
About VeriSign
VeriSign, Inc. (NASDAQ: VRSN) is the trusted provider of Internet
infrastructure services for the networked world. Billions of times each
day, VeriSign helps companies and consumers all over the world engage in
communications and commerce with confidence. Additional news and information
about the company is available at www.verisign.com.
Contacts
Media relations: Victoria Henry, vhenry@verisign.com,
+44 20 8600 0723
Investor Relations: Nancy Fazioli, ir@verisign.com
, 650-426-5146
Statements in this announcement other than historical
data and information constitute forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements involve risks
and uncertainties that could cause VeriSign's actual results to differ
materially from those stated or implied by such forward-looking statements.
The potential risks and uncertainties include, among others, the uncertainty
of future revenue and profitability and potential fluctuations in quarterly
operating results due to such factors as the inability of VeriSign to
successfully develop and market new products and services and customer
acceptance of any new products or services, including the VeriSign Identity
Protection Fraud Detection Service Stock Trading Module; the possibility
that VeriSign’s announced new services may not result in additional
customers, profits or revenues; and increased competition and pricing
pressures. More information about potential factors that could affect
the company's business and financial results is included in VeriSign's
filings with the Securities and Exchange Commission, including in the
company's Annual Report on Form 10-K for the year ended December 31,
2007 and quarterly reports on Form 10-Q. VeriSign undertakes no obligation
to update any of the forward-looking statements after the date of this
press release.
©2008 VeriSign, Inc.
All rights reserved. VeriSign, the VeriSign logo, the checkmark circle,
and other trademarks, service marks, and designs are registered or unregistered
trademarks of VeriSign, Inc., and its subsidiaries in the United States
and in foreign countries. All other trademarks are property of their
respective owners.
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