Australia’s corporate investment regulator, the Australian Securities and Investments Commission (ASIC), has issued an urgent public warning over a sharp rise in increasingly sophisticated pump-and-dump investment scams that have stolen millions of dollars from vulnerable Australian citizens, with elderly Australians bearing the brunt of the harm.
These coordinated scams operate by leveraging deceptive tactics that many investors struggle to identify: scammers impersonate well-known financial institutions, forge endorsements from high-profile respected finance industry figures, and lure victims into private messaging groups on platforms such as WhatsApp. Once recruited, victims are pressured to purchase shares of low-value, lightly traded public companies to artificially inflate the stock price. After the price reaches a targeted peak, scammers sell off all of their own holdings for a profit, which triggers an immediate collapse in the share price and leaves victim investors holding worthless assets worth only a fraction of their original investment. What makes these scams particularly convincing, ASIC officials note, is that victims actually purchase legitimate shares through registered retail brokers, leading many to mistakenly trust the scheme is authentic.
One recent, well-documented example illustrates how destructive these scams can be: a targeted stock’s price surged rapidly to nearly $US11 before crashing back to just $US1 in a matter of days, erasing nearly all of the victims’ investment overnight. Scammers have repeatedly used counterfeit endorsements and stolen identities of prominent finance experts; in one high-profile case, scammers created a fake social media post carrying the Commonwealth Bank logo, featuring a man impersonating former CommSec economist Tom Piotrowski to push fraudulent stock recommendations.
Testimonies collected by ASIC from scam victims lay bare the catastrophic personal and financial toll of these schemes. One 74-year-old retired victim, who was lured into the scam via the fake Piotrowski post, explained how the scammers built trust by sharing a few small, initially profitable stock tips before pressuring her to invest increasing amounts of her retirement savings. The scam included forged branding from both ASIC and the Australian Financial Complaints Authority (AFCA), leading her to trust the offering was legitimate. “It had the logo, it had ASIC’s name on it, and it had AFCA’s name on it. Now if you see that, how can it be wrong?” she said, noting that after the share price collapsed overnight, she was left unable to return to work and surviving on a small aged pension. Another anonymous victim described being so traumatized by the loss that he did not leave his apartment for a full month. Reports from victims document life-altering harm including ruined retirement savings, home foreclosures, and even relationship breakdowns leading to divorce.
ASIC data confirms that these pump-and-dump scams are growing at an alarming rate, with scammers continuously refining their tactics to appear more legitimate. “These scams are becoming increasingly sophisticated, and scammers are exploiting the trust Australians place in recognised experts, financial institutions and investment brands by faking their platforms and endorsements,” ASIC chair Sarah Court explained in the regulator’s warning. Court emphasized that legitimate investment opportunities never come from unsolicited messages from strangers on social media or messaging apps, and urged all Australians to treat any unsolicited stock tip shared through platforms such as WhatsApp or Telegram as a scam. The regulator has called on the public to remain extremely cautious of any investment opportunity promoted through social media or private messaging groups, particularly those that use well-known public identities to build credibility.