'Pump-and-dump' stock market manipulation scams on the rise again: Police
At 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.