Pump-and-Dump Stock Scam
Scammers hype worthless stocks, then sell, crashing the price.
Severity: HighPrevalence: EmergingLast Updated: 2026-02-10
Target Audiences
How It Works
Scammers acquire large quantities of a low-value, thinly traded stock or cryptocurrency token. They then aggressively promote it through social media, messaging groups (Telegram, Discord), forums, and fake "expert" tips, creating artificial hype and driving up the price. As unsuspecting investors buy in and the price rises, the scammers sell their entire holdings at the peak. Once they dump their shares, the price crashes, leaving victims with worthless or severely devalued assets. The whole cycle can happen in days or even hours.
Red Flags
- Guaranteed "hot stock tips" – unsolicited messages or posts claiming a stock is about to skyrocket.
- Social media hype campaigns – coordinated promotion across multiple channels with urgency ("Buy NOW before it moons!").
- Pressure to buy quickly – artificial urgency designed to prevent you from doing your own research.
Protect Yourself
- Avoid hype-based investing – do your own research before buying any stock or crypto asset.
- Research independently – check the company's financials, regulatory filings, and news from reputable sources.
- Use regulated brokers and exchanges that provide investor protections.
Visual Examples
What To Do If You've Been Scammed
- Stop trading based on tips immediately – do not buy more or try to "average down."
- Document all losses, communications, and promotional material you received.
- Report the suspected manipulation to the Israel Securities Authority (or relevant financial regulator) and to police.