The Swedish Financial Supervisory Authority cautions investors against trusting stock tips from online chat groups, highlighting the risk of 'pump and dump' schemes where fraudsters profit at the expense of others.
Financial Authority Warns: Beware of Stock Chat Tips
Financial Authority Warns: Beware of Stock Chat Tips
Be cautious of stock chat groups offering tips on promising stocks. The Swedish Financial Supervisory Authority (FI) is currently receiving numerous calls from consumers who have been deceived.
The scheme often involves enticing investors into various stocks through online chat groups, causing the stock prices to initially rise. The fraudsters then sell at a profit, leaving others to watch the stock prices fall.
This method is also known as 'pump and dump'—where the fraudster inflates the stock price and then sells for a profit.
"Be wary if you are contacted by someone you don't know offering stock tips, even if the person appears to be a well-known figure," says Peter Hallström, senior financial inspector at FI, in a written statement.
If it sounds too good to be true, it probably is.