Swedish small investors have reportedly lost hundreds of millions in stock scams using high-profile names like Riksbank Governor Erik Thedéen as bait. The Financial Supervisory Authority (FI) is now gathering data from banks to assess the extent of the losses, which could reach up to half a billion kronor. The scam, involving 'pump and dump' schemes with obscure Chinese stocks on Nasdaq, has global ties to Iran and Russia.
Swedish Investors Deceived in Million-Dollar Stock Scam – Financial Supervisory Authority Takes Action
Swedish Investors Deceived in Million-Dollar Stock Scam – Financial Supervisory Authority Takes Action
Swedish small investors are suspected to have lost hundreds of millions in stock frauds where names like Riksbank Governor Erik Thedéen are used as bait. The Financial Supervisory Authority (FI) will now collect information from banks to assess the extent of the losses.
Advertisements have appeared on social media platforms like Facebook and Instagram. Various well-known figures such as Riksbank Governor Erik Thedéen or financial profiles Günther Mårder and Christer Gardell entice with promises of quick stock profits if one joins a closed group on the communication app WhatsApp.
Once there, suggestions to invest in various stocks, primarily small and unknown Chinese companies listed on the Nasdaq stock exchange in New York, are made. Shortly thereafter, however, the stocks plummet. This occurs when the fraudsters choose to sell off their own holdings, a so-called 'pump and dump,' leaving only deceived small investors, many of whom have lost everything they invested.
– Our view is that this is a big problem and a very important issue. It concerns the trust in the securities market, says Jimmy Kvarnström, head of the markets area at FI.
Requesting Information
The authority will therefore request information from the four major banks as well as niche banks to get an estimate of how large the losses are. The estimate is that it could be up to half a billion kronor in one of the cases.
– It is largely about increasing consumer awareness but also that banks and trading platforms should look into these issues and be able to issue warnings, information, and perhaps introduce various types of blocks, says Jimmy Kvarnström.
Iran and Russia
The phenomenon is global, and the Financial Times has previously reported that seven Chinese companies plummeted more than 80 percent on Nasdaq in a short period, resulting in a lost market value of 3.7 billion dollars. According to the newspaper, the fraudsters are believed to have connections to Iran and Russia.
Jimmy Kvarnström tells TT that it mainly affects people born in the 60s and 70s. However, hopes of somehow recovering their lost capital are small:
– It is likely so. The profits have been moved outside the banking system, making it difficult to take action.