ASIC puts firms on notice over pump-and-dump scams

Binaya Dahal

Journalist

20 July 2026

The corporate regulator has issued a notice to financial firms over increasing pump-and-dump scams, saying they have an important responsibility to identify and respond to suspicious transaction patterns linked to investment scheme and market manipulation.

Sarah Court, chair at the Australian Securities and Investments Commission (ASIC), said financial organisations cannot turn a blind eye to fraudsters who lure consumers into messaging groups with tips designed to artificially inflate share prices before selling their own holdings, leaving other investors vulnerable to significant losses.

“These scams are becoming increasingly sophisticated, and scammers are exploiting the trust Australians place in recognised experts, financial institutions and investment brands by faking their platforms and endorsements,” Court said.

“Australians expect their banks and financial service providers to remain vigilant to scam activity and take appropriate steps to help protect customers from harm,” she said.

Unlike many investment scams where criminals receive money directly from victims, pump-and-dump schemes often involve genuine shares traded through legitimate exchanges and brokerage accounts.

ASIC commissioner Alan Kirkland said this feature can make the scams particularly convincing, as investors may believe the opportunity is legitimate when they can see the shares in their own trading accounts.

“Many victims don’t realise they’re being scammed because they genuinely own the shares they’ve purchased,” he said.

“The loss occurs when the scammers sell out and the share price collapses. Investors are left holding shares worth a fraction of what they paid.”

Kirkland said scammers were also deliberately targeting Australians nearing retirement because they know many people in this age group have accumulated retirement savings and are looking for investment opportunities.

“Scams are becoming more sophisticated and harder to spot, including the use of AI-generated deep-fake videos of well-known personalities,” he said.

According to the National Anti-Scam Centre’s latest Targeting Scams Report, Australians lost $2.18 billion to scams in 2025, including $837.7 million to investment scams alone.

ASIC said it will continue to work with domestic and international regulators to identify those behind pump-and-dump schemes and pursue enforcement action where appropriate.

In December 2025, four co-conspirators who used Telegram group chats to pump up the share prices of Australian stocks before dumping them at inflated prices were convicted and sentenced to terms of imprisonment.

The four ringleaders pleaded guilty in June 2025 to conspiracy to commit market rigging and dealing with the proceeds of crime.

Court urged Australians to be cautious of investment tips received through messaging platforms.

“If you’re receiving stock tips through WhatsApp, Telegram or another messaging service, particularly after responding to a social media post, you should assume it’s a scam,” she said.

“The reality is that legitimate investment opportunities do not come from strangers on messaging apps, pressuring you into buying shares.”