Canadian Securities Administrators warn of social media ‘ramp and dump’ stock manipulation scams

The Canadian Securities Administrators (CSA) issued an investor warning about fraudulent investment groups promoted on social media that may be running ‘ramp and dump’ stock price manipulation schemes. The CSA described coordinated efforts to inflate low-priced or thinly traded stocks and then sell positions for profit, leaving investors who bought at artificially high prices with significant losses, with recruitment increasingly occurring through social media and private messaging platforms. The warning describes scammers approaching people on platforms such as Facebook and Instagram, building trust and then moving them into closed groups on WhatsApp, Discord or Telegram where they promote specific stocks and pressure members to buy, sometimes at a specified price and quantity on a specific date. It highlights common lures including claims of inside information, fake credentials and impersonation of well-known individuals, companies or financial institutions, as well as a focus on smaller unfamiliar stocks with limited public float, including foreign-headquartered issuers. Investors were urged to be wary of unsolicited advice, check adviser registration and disciplinary history through the CSA’s National Registration Search, consult the CSA Investor Alerts list of firms to avoid, and contact their local provincial securities regulator, the Canadian Anti-Fraud Centre, their bank and local police if they suspect they have been victimized.