UNSOLICITED ADVICE 'No stranger would ever give you a stock tip for your own good. It was true in the 1920s and it's just as true now.' JOHN LEVINE, chair of US-based Anti-Spam Research Group -- PHOTO: ISTOCKPHOTO

The spam messages, which are being sent to Internet users globally, have an attached PDF file urging them to buy shares in a company called Prime Time Stores Inc, according to anti-spam software company SophosLab.

The company being pushed in the campaign sells wireless products and services aimed at the youth market.

Experts at Sophos, who first detected the campaign in Germany on Tuesday, say the 500 million e-mail is a record-breaking example of the 'pump-anddump' spamming technique.

'Pump-and-dump' is when spammers buy shares, orchestrate a spam campaign promoting the company, then wait for a share price to rise before selling their stock for a profit.

'This is staggering. It's one of the biggest spam campaigns we've ever seen,' said Mr Graham Cluley, senior technology consultant for Britain-based Sophos, on Wednesday.

Earlier this year, the US stock market regulator, the Securities and Exchange Commission, estimated that 100 million share-ramping e-mail were sent every week on an average - a fraction of the number Sophos says it has picked up in 24 hours.

'It turns out that it's one of the kinds of spam that actually works,' said Mr John Levine, chair of US-based Anti-Spam Research Group.

'There are at least two academic studies that show that the share does go up and the bad guys make money.'

The stock of Prime Time Stores, which is also the exclusive licensee for 7-Eleven convenience stores in Puerto Rico and the Caribbean, gained 30 per cent on Monday and 14.8 per cent on Tuesday in the days running up to the detection of the campaign.

Sophos estimates that 'pump-and-dump' stock campaigns, which entice consumers with headlines such as 'Ready to Explode', 'Ride the Bull' and 'Fast Money', account for about 25 per cent of all spam nowadays, up from less than 1 per cent in January 2005.

Mr Levine, who is also the author of Internet for Dummies, says the perpetrators are extremely difficult to catch despite efforts by stock market regulators and police.

'Spamming used to be about guys selling fake Viagra from their basements,' he said. 'Now it's likely to be international crime gangs.'

Mr Cluley from Sophos said the share-ramping scams target small stocks, often worth a fraction of a cent, which require only a small increase to deliver big gains.

'They send out fake news about a tiny stock and there are so many day-traders out there that are ready to jump on the bandwagon,' he said, referring to amateur investors who play the stock market from home.

Mr Levine has clear advice for anyone tempted to act on unsolicited investment advice sent via e-mail.

'No stranger would ever give you a stock tip for your own good. It was true in the 1920s and it's just as true now,' he said.

In March this year, the Securities and Exchange Commission decided to suspend trading in the shares of 35 companies that had been targeted by spam in the first such action of its kind.

The regulator has also launched an initiative called Operation Spamalot to combat what SEC chairman Christopher Cox has called an 'illegal and destructive' practice.

AGENCE FRANCE-PRESSE