New Zealand Financial Markets Authority issues updated warning on pump-and-dump scams using social media impersonation and investor chat groups

The New Zealand Financial Markets Authority (FMA) has issued an updated public warning after receiving complaints that Kiwi investors are being caught by a “pump and dump” scam using deepfake-style impersonation of well-known business leaders to drive participation in coordinated trading schemes. The scam typically starts with Facebook and Instagram advertisements featuring impersonated business figures that direct targets into fake investor chat groups on messaging platforms such as WhatsApp. In these groups, an “investment mentor” and apparent members (often bot accounts) provide trade recommendations, sometimes initially involving large, well-known stocks to build trust, before steering victims into buying low-value shares in companies listed on overseas exchanges to artificially inflate prices. Scammers then sell their own holdings at the higher price, leaving victims with losses when prices fall, and may follow up with a false “compensation” offer to extract further payments or harvest personal information. The FMA has shared case details with relevant overseas regulators given some pumped shares are listed on NASDAQ and some companies are based in China, and it has alerted New Zealand banks and impersonated businesses about the pivot in tactics and encouraged them to circulate the warning.