The SEC is warning investors about a sharp increase in spamemail linked to pump and dump stock schemes.

Pump and dump promoters frequently claim to have insideinformation about an impending development, the SEC said. Othersmay say they use an infallible system that uses a combination ofeconomic and stock market data to pick stocks.

However, these scams are the “inbox equivalent of a boiler roomsales operation, hounding investors with potentially falseinformation about a company,” according to the SEC.

The fraudsters behind these scams stand to gain by selling theirshares after the stock price is pumped up by the buying frenzy theycreate through the mass e-mail push.

Once the fraudsters dump their shares by selling them and stophyping the stock, investors lose their money or are left withworthless or near worthless stock, the SEC said.

An SEC investor alert, “Inbox Alert– Don't Trade on Pump-And-Dump Stock E-mails,” notes that thelatest McAfee Threats Report confirms a steep rise in spam e-maillinked to bogus pump and dump stock schemes designed to trickunsuspecting investors.

These false claims could also be made on social media such asFacebook and Twitter as well as on bulletin boards and chat roompages, according to the SEC.

“Investors should always be wary of unsolicited investmentoffers in the form of an e-mail from a stranger,” said Lori Schock,director of the SEC's Office of Investor Education and Advocacy.“The best response to investment spam is to hit delete.”