Warning: Falling Victim to Pump and Dump Scams, Expert Shares £13k Loss

A professional trader lost £13,000 to a convincing pump and dump scam. The scammers posted professional-looking market news and updates, and even provided an investment case for Pheton Holdings, a Chinese company listed on the US Nasdaq. The scammers used deepfake social media adverts featuring well-known figures from the financial sector to promote the scam. The trader, who is a senior professional working in financial markets for a UK bank, invested £13,000 over six weeks, doubling his money before losing everything when the share price crashed.

A professional trader recently fell victim to a sophisticated pump-and-dump scam involving Pheton Holdings (PTHL), a Chinese company listed on the US Nasdaq. The trader, a senior professional working in financial markets for a UK bank, invested £13,000 over six weeks, doubling his money before losing everything when the share price crashed [1].

The scam involved deepfake social media adverts featuring well-known figures from the financial sector, promoting Pheton Holdings. The adverts were designed to appear professional and convincing, luring investors into believing they were receiving legitimate market news and updates [1]. The trader, who had been investing in the stock for six weeks, saw his investment double before the share price crashed, resulting in a £13,000 loss [1].

InvestorLink, a forecasting and analytics firm, had previously warned about the anomalous activities of Pheton and other micro-cap stocks. The firm highlighted unusual social media activity surrounding these stocks, including coordinated promotion clusters on platforms like Reddit [2]. Despite these warnings, investors continued to incur significant losses.

The scam is part of a larger trend of "pump and dump" schemes targeting Chinese concept stocks on the US stock market. In July, seven Chinese concept stocks experienced a collective flash crash, losing $3.7 billion in market value [2]. The FBI reported a 300% increase in complaints related to "pump and dump stock fraud" year-on-year, indicating a growing problem [2].

The trader's experience serves as a stark reminder of the risks associated with investing in micro-cap stocks and the importance of thorough due diligence. Investors should be cautious of unsolicited investment advice, especially if it comes from seemingly legitimate sources but lacks transparency or credibility.

References:
[1] https://www.benzinga.com/markets/equities/25/08/47117575/expert-accuses-fly-e-of-pump-and-dump-scheme-warns-of-severe-stock-collapse-amid-troubling-safety-record
[2] https://news.futunn.com/en/post/60733966/the-cutting-leeks-scheme-in-the-us-stock-market-after