PUBLISHED ONSeptember 05, 2026 7:37 AMBYSean LerAt least 21 cases of stock market manipulation scams allegedly involving "high potential" companies listed on either Hong Kong or US stock exchanges have been reported since July this year.
The police said in an advisory on Saturday (Sept 5) that there has been a resurgence of "pump-and-dump" scams since they last warned the public about it in 2021.
In this scam variant, which is essentially a form of stock market manipulation, fraudsters would promote selected shares using false or misleading claims or by creating an appearance of strong market interest.
This is also known as the "pump" phase, intended to drive up demand for those shares and their prices.
Victims would then buy the shares and the fraudsters would then sell off their holdings at the inflated price — also known as the "dump" phase.
After these fraudsters exit the market, the artificial support disappears and the share price typically collapses rapidly, leaving unwitting investors with substantial financial losses.
In one such case, five victims purportedly bought more than a million shares in a Hong Kong listed company on the recommendation of an "expert".
However, the share price fell by almost 75 per cent in a week, resulting in their combined losses exceeding HK$4.6 million (S$744,000).
According to the police, most victims were approached through social media or messaging platforms such as Facebook and WhatsApp.
The fraudsters create chat groups on these platforms, sometimes using Singapore-registered phone numbers.
They would tout themselves as experienced investors or trading mentors offering investment insights or guidance, sometimes for a fee.
During the trust building phase, fraudsters may first recommend shares that performed well or generated profits for the victims.
Once trust has been established, the victims would be introduced to a "high-potential" company listed on either Hong Kong or US stock exchanges.
They would also be told that its share price is expected to rise sharply in the near future.
"Group members were then strongly urged to purchase the shares immediately after the company’s identity was disclosed," the police said.
During this period, some victims may also encounter accomplices planted in the chat groups.
They would pose as administrators or assistants to contact victims privately and provide additional instructions, reinforce the investment narrative, and maintain pressure on the victims.
Victims would also be asked to provide updates via private chats once the purchases are completed or submit proof of trade.
Police said they believe these accomplices were rewarded based on the number of victims who invested, thereby requiring proof for reward claims.
Some victims were also allegedly told that their trading losses would be reimbursed.
But the fraudsters would become uncontactable or give excuses for not honouring earlier promises.
Members of the public are advised to be wary of stock tips provided online, or by individuals they have not met personally.
No investment or trading strategy can guarantee profits, the police highlighted.
They are also advised to be particularly sceptical of overseas-listed shares with low liquidity and small market capitalisation, as such shares may be more susceptible to price manipulation.
[[nid:744311]]
