21 Pump And Dump Scams Hit Singapore Investors With Over RM2.2 Million Losses

Singapore authorities are warning investors about a renewed wave of stock market manipulation scams after 21 cases involving overseas listed companies were reported since July, with one recent case alone resulting in losses exceeding $700,000 (over RM2.2 million).

Victims are commonly introduced to investment groups through social media platforms or messaging services such as WhatsApp. Some scammers use Singapore registered mobile numbers and construct elaborate chatrooms populated by supposed administrators, investment professionals and other participants.

At the beginning, the recommendations may appear convincing. Victims can be shown shares that have already risen or trades that appear to have generated profits. The apparent success helps establish credibility and makes the eventual recommendation of a supposedly high potential stock seem more credible.

Once confidence has been established, victims are encouraged to buy shares in companies listed in markets such as Hong Kong or the United States.

The manipulation becomes more damaging when large numbers of investors are directed towards the same relatively small or illiquid company. The increased buying can push the share price higher, creating the appearance of genuine market demand. The fraudsters can then sell their own holdings, leaving other investors exposed when the price collapses.

Singapore police said victims may also be pressured to provide screenshots showing their purchases. Accomplices posing as group administrators can contact investors privately, provide additional instructions and collect evidence of completed trades. Authorities believe some of these individuals may receive rewards according to the number of victims who invest.

One recent case demonstrates the scale of the damage. Five victims bought more than one million shares in a Hong Kong listed company after receiving investment advice from the scammers. The stock subsequently fell by almost 75 per cent within a week, producing combined losses of more than HK$4.6 million, equivalent to about S$744,000.

In some cases, scammers reportedly attempted to keep victims from selling by promising to reimburse their losses. When investors later sought compensation after the market collapse, the promises were not honoured and the individuals behind the scheme became unreachable or offered excuses.

Another case involved a Singaporean couple who invested approximately $650,000 in a Hong Kong listed company after being guided by an online investment group. Their holdings subsequently suffered paper losses of more than $500,000.

Police have urged investors to be especially cautious when receiving stock recommendations from people they have never met. They also warned against tactics that create urgency by suggesting investors will miss an exceptional opportunity unless they buy immediately. Low liquidity and small market capitalisation are another area of concern because such shares can be more vulnerable to manipulation, particularly when a concentrated group of buyers is directed towards the same security.

For Malaysian investors, the warning carries particular relevance as access to overseas markets becomes easier through digital brokerage platforms. A stock being listed on a recognised foreign exchange does not automatically make an investment recommendation safe, while an online community filled with apparently successful investors can be manufactured to create false confidence. Investors in Malaysia should therefore treat unsolicited stock tips, aggressive buying pressure and unusually confident profit claims as warning signs, particularly when the recommended security is thinly traded or difficult to independently assess.