Scammers started a new WhatsApp group that claimed to offer inside trading tips the day after a group of Australians were arrested for allegedly operating a pump and dump scheme to artificially ramp up share prices, in another sign of how regulators have to play whack-a-mole to protect consumers.
The administrator of the WhatsApp group invited this masthead along with hundreds of others to join the group and receive potentially illegal stock market tips.
The messages shared with the group.Credit: Stephen Kiprillis
Four people were charged with share market manipulation on July 23 following an investigation by the Australian Securities and Investments Commission.
ASIC alleges the four were behind a popular Telegram group, ASX Pump and Dump, that encouraged members to engage in a type of market manipulation known as a pump and dump scheme. In such a scheme, members of a group work to illegally drive up share prices before offloading the shares – now priced at an overinflated value – to unsuspecting investors.
On July 24, this masthead received a notification to join a new pump and dump group on WhatsApp. The group appears to have been set up on the evening on July 23, within hours of the ASIC case being made public.
The next day, the administrator of the group, “Alice”, told invitees that the group would provide stock market insights and educational sessions from one of Australia’s best stock pickers, Warryn Robertson from Lazard Asset Management – without Robertson’s knowledge or permission. For an additional fee, participants were told they could join the VIP chat group and receive tips on how to manipulate the stock market.
Scammers invited this masthead into a group promising share market manipulation tips.Credit: WhatsApp
In one message, Alice told the group: “We will update the VIP group 30 minutes before the [share price] rise, so that everyone has time to prepare to buy. Click my avatar to contact me, I will invite you to join the VIP group to receive the latest news and complete trading strategies.”
In another message, Alice promised that members would “get the latest AU stock name and the lowest buying price with a profit of more than 50 per cent*” if they clicked on a link to join the VIP group.
A screenshot of a WhatsApp message shared with the group.Credit: WhatsApp
It appears that neither the education seminars nor the stock market manipulation VIP club were genuine offers but that they instead were a scam set up to lure in Australians curious about such schemes, as Alice changed their mobile phone number and used photos of different men and women as their profile picture over the course of several messages.
Sources close to Lazard, speaking anonymously as they were not permitted to speak on the record, said the group was horrified to learn Robertson’s name had been used by the scammers.
Lazard declined to comment but was reviewing the situation.
It joins a long list of major financial institutions, including UBS, Barrenjoey and even the Commonwealth Bank, that have had their brands used by scammers to fool the public into believing products offered by the scammers, such as investment bonds, are real.
Scammers are also increasingly using the names and images of high-profile or trusted Australians such as Dick Smith, Andrew Forrest and Gina Rinehart to lure in victims. Forrest is suing Facebook owner Meta in the US over the use of his image in scam ads.
The government is in the midst of setting up a code of conduct for social media platforms, messaging services, telcos and banks that will force companies to compensate victims of scams if they have not met obligations in detecting and preventing scam activity.
Rosie Taylor, head of campaigns for consumer advocacy group Choice, said more needed to be done to safeguard consumers.
“Instead of focusing on the game of whack-a-mole with the scammers themselves, if we regulated the businesses enabling this activity, it would give regulators more direct tools to stop these scams affecting consumers,” she said.
“The sophistication of these scams means it is getting harder and harder for anyone to really identify and protect themselves, and that’s why we’ve been advocating for stronger laws to require the big tech platforms like WhatsApp to do more to protect all of us from scammers.”
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