The Australian Securities & Investments Commission has warned consumers to treat stock tips received through social media and messaging apps as likely scams, citing a rise in pump and dump schemes that use fake celebrity endorsements and impersonations of financial institutions. The scams typically direct consumers from social media posts into WhatsApp, Telegram or similar groups, where fraudsters posing as market experts or their assistants push share purchases to inflate prices before selling their own holdings and leaving investors with losses. ASIC said the schemes are becoming more sophisticated, including through AI-generated deepfake videos, and appear to target older Australians nearing retirement. In many cases, victims buy genuine shares on real exchanges through legitimate brokerage accounts, which can make the fraud harder to detect even as the investment recommendation itself is manipulated. ASIC described a common pattern in which fake posts use the identity of well-known commentators, economists or institutions, group members pose as successful investors to create credibility, and scammers ask for proof of purchase before dumping their shares. One recent example saw a share price rise to almost USD 11 before falling to USD 1 shortly after. The regulator also said banks and other financial service providers should identify and respond to suspicious transaction patterns linked to investment scams and market manipulation. ASIC is continuing to work with domestic and international regulators to identify those behind these schemes and said it pursues enforcement action, including criminal prosecutions, where perpetrators are in Australia.

Original source Back to tracker