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Hong Kong says social media used in 20% of its stock manipulation cases

The targets of such scams are local retail investors who account for roughly 10% of Hong Kong-listed shares trading value, according to exchange data, a relatively high proportion compared to other markets.

The Securities and Futures Commission , has, in recent years, tried to take a more active role in policing the market.

In the 12 months to end March 2020 it investigated 478 cases of market misconduct, mostly alleged market manipulation or insider dealing.

In a ramp and dump scheme, fraudsters typically purchase a significant portion of shares in a small company with low liquidity, driving up the price.

They then use social media platforms like Facebook, WhatsApp and WeChat to spread favourable, normally false news about the company, sometimes posing as investment experts, drawing more buyers in and allowing the fraudsters to offload their shares.

To avoid falling victim to these scams, the public must be vigilant when offered unsolicited investment advice or tips on social media, SFC chief executive Ashley Alderin said in a statement.

Original article
Author: Reuters Staff

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