Clients at brokers offering cash equities trading have been hit by another pump and dump scheme involving a US-listed company from East Asia.
The share price of Pheton Holdings, which trades on the Nasdaq, had risen almost 1,400% from a low in early February. The price began rising dramatically in early June.
Shares in the company rose dramatically over the last week before bombing on Wednesday.
Having traded at a peak of just over $32, the shares fell by almost 97% after the market opened. The company’s shares closed at $1.10.
This is now the fifth pump and dump scheme that TradeInformer is aware of where broker clients have been targeted.
The scammers have used small cap companies based in East Asia in every instance.
What seems to happen is that the scammers pump the price of a specific stock. They then push traders into groups on messaging apps like Telegram and WhatsApp, typically via paid ads on Facebook and other social media platforms.
They will then instruct traders to all buy simultaneously, allowing the scammers to exit their positions. Meanwhile buyers are left holding a worthless stock as the scammers push the price down by dumping all their stock.
