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HK businessman guilty of spam to influence stocks

Carol Ko | Jan. 7, 2009
Stock prices of Chinese companies surged as tens of millions of spam messages were sent.

HONG KONG, 7 JANUARY 2009 A Hong Kong businessman has recently pleaded guilty for his part in dispatching tens of millions of spam messages to pump up the prices of Chinese stocks between 2004 and 2006.

John Hui How Wai, a resident of Hong Kong and Vancouver, was the chief executive officer of China World Trade, one of the companies whose stock was inflated as a result of the scam. As part of his plea agreement with prosecutors, the 50-year-old businessman could face a sentence of between 63 and 78 months in jail.

Spam gang member

As in many cases of cyber crime that the world encounters today, Hui was not working alone, said experts at Sophos, a UK-based information technology security and control firm,. In fact, he is believed to have been part of a gang which included the notorious Alan Ralsky who was previously accused of being the world's biggest spammer.

The alleged association with spam king Alan Ralsky really spells out the seriousness of this case, said Graham Cluley, senior technology consultant at Sophos. While Ralsky has always maintained he is not a spammer, but a legitimate e-mail marketer, the US Department of Justice claims that in the summer of 2005 alone, Ralsky made US$3 million through illegal spam operations. This is likely to just be the tip of the iceberg if it's true that Ralsky is involved in other scams too.

Hui's other fellow gang members Francis Frankie' Tribble and Judy Devenow pleaded guilty to conspiracy and other charges in October, and are scheduled to be sentenced next year. They have all agreed to give evidence against Ralsky.

While there's been a significant drop in pump-and-dump stock manipulation spam since this alleged conspiracy, it's still encouraging to see authorities pursue cases like this, and bring the perpetrators to justice, said Cluley. Without punishment, the cyber criminals may be tempted to revisit old techniques and this will cause more trouble for computer users.


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