Yet, the price boost was not driven by good news issued by the company but a massive unsolicited e-mail campaign sent from a host of computers--a bot net--compromised by a difficult-to-detect Trojan horse program known as Rustock. Each computer received an image touting the stock that had been designed to foil antispam software and started sending out e-mail messages with the attachment.

The activity is part of the latest Internet Age pump-and-dump stock scheme. The people involved typically buy stock at a low price, use a bulk e-mail campaign to pump up prices, and then sell--or dump--the stock at the higher price. Because many companies touted by such spam are immediately suspected of involvement in the promotion, Diamant Art went on the defensive and quickly released a press release disavowing the campaign.

"The Corporation has again found itself the victim of persons or of self-proclaimed investment advisors who issue spam e-mail (using information) they acquire ... directly from public domain sources or public speculation (and) purporting to come from the Corporation," Diamant Art stated in a press release issued on the same day. (The company did not respond to requests for comment.)

Companies will likely have to keep on issuing such statements.

A year ago, stock spam made up only about 5 percent of all spam e-mail messages, according to e-mail service provider MessageLabs. Now, stock spam is on a trajectory to become the biggest category in unsolicited e-mail marketing, with 35 percent or more of spam touting a stock, according to the firm. Anti-virus firm Symantec--the owner of SecurityFocus--has also noted the trend, finding that the monthly fraction of spam dedicated to stocks varies between 20 percent and 40 percent.

The increasing popularity of stock-touting spam is also notable because the total amount of spam--driven by bot net activity--is on the rise. While a Christmas drop in the number of compromised PCs appears to have led to a general drop in spam volume, the number of PCs coopted by bot nets for use in spamming operations continues to increase.

Of course, the rise of stock spam should come as no surprise.

Stock spam tends to boost prices, though the average gain is far more modest than the trebling in price for Diamant Art. Last year, two researchers studied 93 stocks touted by unsolicited e-mail and found that the price increased by 1.7 percent on average on the day the spam was first received. On the following day, the stock price dipped 0.9 percent on average and then rose by that same amount on the second day.

Such minuscule gains are now more the rule than the exception, said John Reed Stark, chief of the Office of Internet Enforcement at the U.S. Securities and Exchange Commission (SEC).

"Stocks do go up because of spam in some cases," Stark said. "In the early days, the price changes were more like 15 cents to 15 dollars. Now I don't see the significant price jumps that we use to see."

Yet, stock spammers are becoming more savvy about the practice. While the overwhelming majority of e-mail touting the stocks of specific companies are fraudulent and violate securities regulations, the spammers do at least attempt to dress up the e-mails in the trappings of legality.

"The spam in the early days--by which I mean the late 1990s--use to contain blatant falsehoods," Stark said. "It was very easy to prove the false statements. Now, the spammers aren't as bold in their projections and use disclosures to attempt to appear legitimate."

Moreover, the programs used to send spam are evolving as well. Pump-and-dump spam campaigns are increasing sent by computers that have been compromised by bot software--programs that turn a victim's system into a component of a massive network that can be remotely commanded.

In the Diamant Art pump-and-dump campaign, a bot program--dubbed Rustock and flagged by antivirus firms as the latest advanced threat--was used to compromise PCs.

In many cases, the exact means that spammers use to send out stock-touting e-mail is unknown, but this time, south of the Canadian border in the United States, a security researcher witnessed the entire attack.

Researching the impact of bot software and Trojan horses is what Joe Stewart does.

The senior security researcher at SecureWorks has reverse engineered bot software and purposely infected his own systems to monitor what goes on in the illicit networks. When he came across a copy of Rustock, a program that drafts PCs into bot-net armies, he decided to take a look into how the program was being used.

"Rustock is very advanced in the amount of stealth is uses once it is on the system," Stewart said in an interview with SecurityFocus. "When it first came out, people were warning because it was a new rootkit, but its spam features are also interesting."

Stewart found that his Rustock-infected system received spam for a single stock, that of Diamant Art. The spam message, which took the form of an e-mail with an embedded image touting the stock, came into his compromised system on the weekend before Monday, December 18, with a command to start the spam campaign.

Stewart researched the stock activity for the company and found that the week before, more than 11.5 million shares were bought on a single day for anywhere from $0.0008 and $0.0011 a share. A normal trading day rarely saw more than a tenth of those shares trade hands.

On December 18, a Monday, the market opened to brisk trading in Diamant Art's stock, driving the price to a peak of $0.0025. If the 11.5 million shares were sold at the peak for more than $28,000, the sellers may have made more than $18,000 for a single week's worth of effort.

The profit, while modest for cybercrime, underscored the appeal of stock spam, Stewart said in a blog post on the research.

"I wonder if the spams touting Viagra and Rolexes have ever made that much profit so quickly for the spammers with so little effort and almost zero overhead," he wrote. "It's little wonder why stock spam is taking over."

In the second half of 2006, a program called SpamThru drove a large increase in stock spam using a bot net of more than 70,000 computers. There is some evidence that the same Russian spammers behind that increase are replacing the SpamThru software with the latest bot program, Rustock, according to Matt Sergeant, senior antispam technologist with mail service provider MessageLabs.

"Rustock seems to be one of the most popular bot programs at the moment," Sergeant said. "It probably is a successor to the earlier stock spam program, SpamThru. It is probably written by the same crew."

Rustock, which appeared in June 2006, brings together a host of features found in other malicious software, making the program difficult to detect and remove. The software has rootkit-like features, hiding itself among the components of the Windows operating system. The program also uses polymorphism, changing itself each time it infects a system in order to avoid antivirus software. Moreover, a bot net created using Rustock sends out messages with random words and an image with the actual message. Such image spam is difficult for antispam software to detect and block.

The technical knowledge exhibited by the writer of the program makes it unlikely that the person is actually committing the attack, but part of a specialized team, said David Cole, director of Symantec's Security Response team.

"The person that wrote Rustock had a deep technical knowledge of how antivirus and anti-rootkit technology works today," Cole said. "A person with that sort of knowledge is not going to be thinking about a stock pump-and-dump scam. The whole attack is probably involves multiple people."

Because the bot software does not take commands through chat rooms but uses the language of the World Wide Web, the Hypertext Transfer Protocol or HTTP, SecureWork's Stewart could not eavesdrop on the people controlling the bot net. He could merely watch what his compromised computer downloaded and was asked to do.

While such difficulties could inhibit investigating the fraudsters behind the Diamant Art pump-and-dump scheme, stock transactions allow the U.S. Securities and Exchange Commission (SEC) to use other methods to track down the suspects.

"The bottom line is that investigations are basically gumshoe work," said the SEC's Stark. "You track all three trails--the money trail, the trading trail and the Internet infrastructure trail--and you see where it leads."

In some cases, the best the SEC can do is block the profits from such scheme from reaching the fraudsters. In December, the regulatory agency filed a civil case against an alleged account intruder, charging that the person used their access to victims' PCs to liquidate assets in their portfolios and use that money to buy a targeted stock and pump up the security's price. In more than two dozen schemes, the suspected fraudsters made more than $353,000, according to the SEC.

Yet, average consumers should not look to cash in. For anyone considering investing in a stock because they get an e-mail touting the security, Stark's advice is black and white.

"We have been very good at telling people that you shouldn't invest in a security touted by a spam," he said. "It should treated like a flyer that you find on your windshield--either rip it up or notify us."