The Securities and Futures Commission (SFC) urges the public to remain vigilant against investment scams involving fraudsters impersonating well-known stock commentators claiming to offer investment advices that guarantee high returns. In recent cases reported to the SFC, scammers lured victims, through social media platforms and instant messaging apps, into participating in ramp and dump schemes – a form of stock market manipulation.
In a typical ramp and dump scheme, fraudsters aggressively promote and “ramp” up the price of small-cap or less liquid stocks, often presenting themselves as reputable market experts. They may offer so-called “inside information” or investment tips, encouraging investors to buy the shares at artificially inflated prices. Once the price is ramped up, the fraudsters then quickly “dump” their holdings, selling at an elevated price and leaving the victim investors exposed to significant losses as the share price collapses. There are also cases where victims were lured into trading on fraudulent platforms or apps, on which investors reported difficulties with asset withdrawal.
On some occasions, the fraudsters approached the victims after they suffered losses, claiming that “compensation” may be arranged upon payment of additional “deposits” or “handling fees”. When the victims had transferred funds into the designated accounts, the fraudsters broke off contact with the victims.
Most of the time, investors do not know the true identities of the people who urge them to buy the stock or the reliability of the information they provide. Scammers may use fake social media profiles, counterfeit documents, or impersonate trusted commentators to gain credibility.
The SFC has reported these cases to the Police, and will continue to join forces with other law enforcement agencies to crack down on investment scams.
The SFC strongly advises the investing public to:
- Be especially wary of offers that seem “too good to be true” on social media or messaging apps.
- Exercise extreme caution against unsolicited investment advice, especially an online “friend” asks you to send a screenshot of your trading record.
- Use only official company payment channels and always verify the recipients’ identities by confirming their details through trusted sources. Avoid depositing funds to individual bank accounts.
- Report any suspicious investment activity, impersonation, or ramp and dump schemes to the SFC or the Police immediately.
For more information on scam prevention and known fraudulent activities, visit the SFC’s Alert List and the Police’s Anti-Deception Coordination Centre.
