Dear friends,
As previously shared, please be aware and exercise caution of the social media sites you visit as some of the sites could be involved in stock manipulation. Instead, one should not have a business relationship if the other party is not licensed to deal in financial matters. Please work with a licensed practitioner instead. If you need help, please kindly fill in your contact details on the right or connect via linkedin by clicking here.
Source below:https://www.channelnewsasia.com/news/business/hong-kong-stock-manipulation-scam-social-media-13141700
A view of Hong Kong's Exchange Square. (File photo: AFP/Anthony WALLACE)
HONG KONG: Hong Kong's financial markets watchdog said on Thursday (Sep 24) that about 20 per cent of the market manipulation schemes it is currently investigating are so-called "ramp and dump scams" conducted via social media.
The targets of such scams are local retail investors who account for roughly 10 per cent of Hong Kong-listed shares' trading value, according to exchange data, a relatively high proportion compared to other markets.
Many small cap stocks in Hong Kong are little traded and prone to wild price swings and sudden crashes. The Securities and Futures Commission (SFC) has, in recent years, tried to take a more active role in policing the market.
In the 12 months to end March, the SFC investigated 478 cases of market misconduct, mostly alleged market manipulation or insider dealing.
In a ramp and dump scheme, fraudsters typically purchase a significant portion of shares in a small company with low liquidity, driving up the price.
They then use social media platforms like Facebook, WhatsApp and WeChat to spread favourable, normally false news about the company, sometimes posing as investment experts, drawing more buyers in and allowing the fraudsters to offload their shares.