"Get AXCP first thing Wednesday, this is going to explode in the next 2-5 days. Good luck and trade out at the top!!!"
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Pumped, dumped
By JOHN ROLFE
October 10, 2005
THE corporate watchdog has warned investors to avoid Asian share scams after an investor lost $70,000 on a bogus tip.
Australians are receiving unsolicited e-mails that appear to emanate from Russia and contain recommendations for shares in countries from Thailand to South Korea.
An e-mail from a fake .ru address, circulating last week, said: "Get AXCP first thing Wednesday, this is going to explode in the next 2-5 days. Good luck and trade out at the top!!!"
And explode it did. AXCP, which is listed on the South Korean market, rose from a close of about $4.10 on Tuesday to nearly $5 by lunchtime Thursday. Volumes were many times higher than Tuesday or Monday.
But the Australian Securities and Investments Commission said such tips were probably pump-and-dump scams.
"Ninety-nine per cent of the time it's a scam," Commissioner Berna Collier told The Daily Telegraph.
"It is trying to encourage you to buy shares in companies that are sometimes on the verge of bankruptcy, or someone is trying to offload shares and wants to boost the price first."
International reports say that up to 200 companies in the region have been linked to share promotions via spam.
Complaints to ASIC about "pump-and-dump" share scams rose by 75 per cent in July compared to June.
In September, one complainant admitted to losing $70,000 on a tip to invest in a Thai stock. Another person said he had dropped as much as $20,000 on a similar scam.
Ms Collier said: "My advice is that people should take care, think about speaking to a licensed broker here before they invest in such shares – and check the facts.
"If you buy shares in these companies and they are actually worthless, who are you planning to sue?
"ASIC has limited ability to act on your behalf."
"It's extremely difficult to get any money back," Ms Collier said.
AXCP, or Allixon International Corp, denied any link to the spam tips.
"We believe our progress is exciting and newsworthy. But we do not use or endorse spam e-mail or unsolicited faxes as a means to 'tout' our company to potential shareholders," Allixon CEO Hwan Sup Lee said in a statement on the company's website.
Allixon has not posted financial statements on its website since December 2003.
The last posting, the 2003 annual report, shows the company's liabilities exceeded assets and that expenses were outstripping revenue.
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