ASIC Warns of Rising ‘Pump-and-Dump’ Investment Scams
Synopsis
Australia's corporate regulator has warned that pump-and-dump scams are costing investors millions, with fraudsters using fake celebrity endorsements and impersonating financial institutions to manipulate share prices.
Australia’s corporate regulator is warning investors to watch out for an increasing rise in pump and dump investment scams, with share manipulation taking place over messaging apps, social media and fake identities by organised fraud rings.
Scams are becoming harder to detect, with them featuring legitimate listed companies and genuine share purchases on regulated share trading platforms, ASIC said. In such scams, fraudsters manipulate the demand for certain shares and buy them at artificially inflated prices before their own selling at the increased value has driven the price of the shares up, leaving other investors out of pocket.
Investment Scams Continue to Generate the Highest Financial Losses
ASIC's caution comes after the determination that fraud on investments is Australia's most expensive fraud type. In 2025, the National Anti-Scam Centre's Targeting Scams Report 2025 reported that Australians suffered losses of $2.18 billion across all scams, with investment scams leading the way with total losses of $837.7 million.
Organised groups are using fake investment identities and messaging groups to pump the price of certain shares up before dumping them. Scammers posing as licensed investment firms, investment advisers or public figures are the most common approach when trying to gain legitimacy and have victim recruitment done through platforms like Whatsapp or Telegram, and invite then to a chat group where the promise of a quick profit on a stock is made if the group acts quickly together.
ASIC Chair Sarah Court, commented that no legitimate investment opportunity will start with an unsolicited message or request sent to you through social media and messaging apps and investors should always conduct their own checks of an investment tip before they part with any money, particularly one coming from a stranger online.
Global Authorities Report Similar Fraud Patterns
This is not an issue just in Australia. The Federal Bureau of Investigation (FBI) has issued a warning regarding "ramp and dump" tactics of criminal organizations that manipulate lightly traded stocks via online communication.
According to the INTERPOL Global Financial Fraud Assessment 2026, investment fraud remains among the biggest financial fraud categories globally, largely due to growing use of encryption communication and organised international fraud rings.
The regulator has boosted its efforts against online investment fraud. ASIC took down 11,964 websites engaging in investment and phishing scams in 2025 - almost double the figure from the previous year - and helped take down more than 1,100 investment scam ads from online advertising platforms.
Investors should be vigilant to unsolicited share tips, check the identity of whoever is giving investment advice and not make investment decisions based on recommendations received in private messaging groups.
Source: Yahoo Finance
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
