Yesterday, U.S. Attorney Preet Bharara announced that eight dockworkers at the Port of New York and New Jersey, plus three other people, were involved in a $34 million cocaine smuggling ring that brought 1.3 metric tons of cocaine from Panama into the NYC area. And during that investigation, they found a "pump-and-dump" stock scheme where another longshoremen and others were using Twitter and Facebook to falsely hype up stocks. On the Waterfront, indeed!

The NY Times reports, "The longshoremen used their access to secure areas of the ports to unload drugs from Panama without detection from law enforcement authorities... In some cases, unloading a single duffel bag of cocaine would earn a longshoreman as much as his entire year’s salary, Mr. Bharara said."

As for the stock scheme, the criminal complaint explains (PDF):

"The discovery of the longshoremen involvement led to a wiretap and financial investigation that revealed links among over 15 web sites, Facebook pages, and Twitter feeds (collectively the "Internet Stock Tips") that purported to provide penny stock picks based on the authors’ expertise and independent research. In truth and in fact, however, the Internet Stock Tips were orchestrated by participants in the stock fraud scheme to dupe unsuspecting investors into purchasing the stock in order to cause an increase in the stock price and
generate trading volume. Once those goals were achieved, participants in the scheme sold their interests in the stock and realized gains, the fraudulent recommendations ceased, and victims who purchased while stock prices were on the rise lost a
significant portion of their investment, sometimes within hours. Issuers of the Internet Stock Tips were often compensated by other participants in the scheme who were orchestrating the "pump and dump" operation.


For all that "work," the schemers made $3 million while the investors lost $7 million.