Despite warnings from our SPF, MAS and Straits Times, people continue to fall victim to pump and dump scheme.
Alas a friend bought HK stock Renco Holding last Thurs and today it fell 64% in a day. Thousands of hard earned money lost in a few days.
Modus Operandi (Adapted from https://www.straitstimes.com/singapore/courts-crime/seven-victims-lose-over-145-million-in-stock-buying-scam)
- Fraudsters pose as attractive women on social media and initiate conversation.
- To cultivate trust, they do not mention buying shares at first but claim to want to get to know their victims better.
- Once the fraudsters sense that they have gained the person’s confidence, they claim to possess insider information and encourage victims to buy the shares of certain overseas-listed companies, promising quick profits.
- Fraudsters pose as investment gurus or share-trading experts
- They invite multiple victims to chat groups on instant messaging platforms, purportedly to share their insights on the stock market.
- To create the illusion that they are legitimate, the fraudsters may first offer stock recommendations that turn out to be profitable.
- Then, they tell their victims that the share price of a certain “high quality” company will soon increase significantly and encourage them to invest.
Please be especially skeptical of recommendations to purchase overseas listed shares with low liquidity, small market capitalization. This is because such shares are highly volatile and more susceptible to manipulation by fraudsters.
- I'm a remisier with Maybank Securities, and as a bonds and REITs investor myself, I guide my clients to build resilient bonds and REITs portfolios. If you like to be guided, please open a trading account to become my client; It's free!
- WealthLions is my blog where I journal my trading ideas and share my opinions about the markets. If you like to be kept posted of my new blog posts and events, please join my Telegram Channel and subscribe to my mailing list. No spam, I promise.