ByDr. Tim Sandle
DIGITAL JOURNAL
May 27, 2026
WhatsApp has described the block as a "backwards step" - Copyright AFP Kirill KUDRYAVTSEV
Complaints about so-called “pump-and-dump” investment schemes have surged by 330% over the past year, in what analysts describe as an increasingly sophisticated wave of online fraud targeting novice traders. The rise reflects a broader shift in how financial crime operates in the social media age: decentralised, algorithmically amplified and often hiding in plain sight.
Pump and dump schemes thrive on misinformation, hype and time pressure.
Once associated with boiler-room cold calls and obscure bulletin boards, pump-and-dump schemes have found fertile ground on platforms such as Reddit, WhatsApp and Telegram, where informal communities and viral momentum can blur the line between legitimate advice and coordinated manipulation.
New analysis by BrokerChooser, which sifted through more than two million posts and comments across major finance-related Reddit forums, suggests these scams are now among the most widely discussed forms of investment fraud.
According to the data, pump-and-dump schemes account for just over 12% of scam-related discussions—roughly one in eight posts—making them the second most prominent category behind general investment scams. More broadly, scams now feature in nearly a third of all cybersecurity-related conversations on Reddit, an indication of both their prevalence and the growing reliance on peer forums for support after financial loss.
When stock collapses
Behind the statistics are individual stories of significant personal harm. One woman in her 50s, based in the north-east of England, described how she lost £50,000 after joining what appeared to be a legitimate investment group on WhatsApp.
Hers tory has been passed onto Digital Journal by BrokerChooser. Introduced by a friend, the group presented itself as a community of informed traders, sharing daily stock analyses and apparent success stories.
“I thought I was being careful,” she said. “I checked what I could online, but the more I searched, the more similar content appeared. It made everything feel credible.”
That experience reflects a well-documented feature of modern digital platforms: recommendation algorithms that reinforce existing beliefs. In this case, repeated exposure to similar investment narratives—some genuine, others fabricated—created an echo chamber in which scepticism gradually gave way to trust.
The group’s strategy was patient. Over several months, members were shown examples of accurate predictions and modest gains, building confidence before introducing a specific stock: Masonglory (MSGY), a little-known equity touted as poised for rapid growth. When its price initially rose as forecast, the illusion of legitimacy deepened. Then came the collapse. Within days, the stock lost around 90% of its value.
“It happened almost overnight,” she said. “By the time I realised, it was too late.”
Even after the losses, group administrators continued to message members, promising recovery strategies and legal support—common tactics in fraud schemes designed to extract further funds from victims already under psychological pressure.
Four months later, she remains in the group, gathering evidence in the hope of exposing those responsible. “I don’t want them to get away with it,” she said. “But this has cost me years. I’ll have to work two or three years longer before I can retire.”
Case counts rise
Experts say such cases are becoming more common as scammers adopt more sophisticated methods. Ádám Nasli, head broker analyst at BrokerChooser, tells Digital Journal that the appeal of pump-and-dump schemes lies in their accessibility—and their plausibility.
“Penny stocks, often trading below £1, are marketed as an easy entry point for beginners,” he said. “But in reality, they are highly vulnerable to manipulation. Low liquidity and limited transparency mean relatively small amounts of coordinated buying can drive dramatic price movements.”
The digital environment has also lowered the barrier to entry for fraudsters. Private messaging platforms offer encrypted spaces with limited oversight, while advances in artificial intelligence enable the creation of convincing fake accounts, automated commentary and even simulated trading activity designed to create the illusion of demand.
The result is a feedback loop: apparent momentum attracts real investors, whose participation then fuels further price increases—until those orchestrating the scheme sell their holdings, triggering a rapid decline.
For regulators and platforms, the challenge is substantial. The decentralised nature of online communities, combined with the speed at which narratives can spread, makes coordinated enforcement difficult. At the same time, the line between legitimate speculation and manipulation is not always easy to draw. There is a clear case for new, tighter regulation.
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