The Securities and Futures Commission has recently concluded an online campaign alerting the public about the use of online platforms to defraud investors.

Online investment scams typically target retail investors with an interest in stock trading and other investments such as cryptocurrency.

A common form of share investment scam is the ramp-and-dump scam. A ramp-and-dump scam is a form of stock market manipulation whereby the fraudsters would use different means to “ramp” up the share price of a listed company and lure investors to buy shares at an artificially high price. The fraudsters would “dump” the shares to other investors for a profit. Such schemes can result in the collapse of a listed company’s share price.

Other forms of investment scam may even involve investments in shares of a non-existent company or IPO.

To induce unsuspecting investors to invest in the shares, fraudsters or their accomplices typically work patiently to establish a relationship of trust through frequent contacts and communication on social media, telephone calls and/or email. Once the trust is in place, the fraudsters may claim that they have inside information about shares in a company and use the promise of guaranteed profit to induce the investors to part with their money. In certain cases, fraudsters may impersonate well-known investment advisors or claim to be a licensed or registered corporation to instil confidence in the investors. Some fraudsters may also set up…

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