A "widespread spam campaign" has been uncovered that attempts to make money by encouraging users to buy stock in a company called Southern Cosmetics and illegally inflating its stock price.

The emails, which consist of an embedded graphic in an attempt to avoid detection by anti-spam filters, tell recipients that savvy investors should buy stock in the company because of business deals it is making with cosmetics firm Naomi LLC.

Since this spam campaign was launched, an examination of Southern Cosmetics' share price shows that there has been a marked increase in trading in the stock.

The share price rose to a high of 6.6 US cents from its pre-spam campaign low of less than one US cent per share.

The scam is an example of a 'pump and dump' campaign by spammers purchasing stock at a cheap price and then trying to artificially inflate its price by encouraging others to purchase more, often by spamming 'good news' about the company to others. The spammers then sell off their stock at a profit.

IT security firm Sophos reported that 'pump and dump' stock campaigns account for approximately 15 per cent of all spam.

"Spammers spread short-term 'investment advice' in the hope of pumping a stock enough to offload their own shares at a profit," said Graham Cluley, senior technology consultant at Sophos.

"The increasing quantity and sophistication of 'pump and dump' campaigns suggests that there is plenty of money to be made. Of course, legitimate investors are left to bear the after-effects of any eventual stock dump."