Fraud awareness

Beware of being treated

Be fraud aware

Australian investors are being increasingly targeted by investment scams carried out via social media platforms where fraudsters offer opportunities to invest in financial products and crypto assets with promise of high guaranteed returns and little or no risk. The fraud can take different forms and below are two examples.


Pump and dump

A pump-and-dump scheme is a type of fraud which generally involves in 3 stages:

  1. Accumulation: the scammer accumulates the holding of target instrument over a period
  2. Pump: the offender artificially pumps the price through means of spreading misleading or greatly exaggerated statements.
  3. Dump: the fraudsters sell off what they bought to unsuspecting buyers at the higher price. Since the price was inflated artificially, the price usually drops sharply, leaving buyers who bought on the strength of the false information at large loss. 


Fund management scam

Investment or fund management scams entice people to invest through their managed accounts and generally promise high returns. You may initially receive some returns, which gives the impression that their trading has been a success. The scammer will then encourage you to invest more money or introduce a friend or family member to invest. However, eventually the returns stop and your account may be suspended and there is no further contact with the firm. Sometimes the investment offer is completely non-existent, and sometimes the money simply goes to their own bank account.


Warning signs of scam

Impressive profile: Scammers may impersonate or purport to work for regulated and well known firms, claim they have non-public material information about a company, or present a screenshots of successful trading records.

Promise of high return with minimal risk: if it is something too good to be true, then it probably is. “Guaranteed return” can be a warning sign.

Unsolicited contact: The initial reach out can take different forms, such as email and cold calling. With the advent of the internet, scams via social media and online forum are more prevalent.

Pressure selling: they may create a false sense of urgency to get into the opportunity. you may be asked to act quickly or you may miss out the opportunities

Start with small to prove their capability: they may ask you to start small to give them a chance to prove what they can do and then push you to invest more once you see the result.

Complicated jargon and language: sometimes the fraudsters may use complex language to perpetrate the investment opportunities, which could be deemed as another red flag.


Reporting a scam

If you spot any of these signs, are suspicious about any matters, or have been scammed, please report them to ASIC.


Protect yourself

Get professional advice: you should seek independent legal or financial advice from licensed entity if deemed necessary.

Do your own research: Take time and do your own research and ensure you read and understand the disclosure documents. Also you should verify the identity of the firm or profile they claim to be. To give clients financial advice in Australia, the advisor needs to be licensed, which can be verified via ASIC website. Entities being impersonated by the scammers may have impersonation fraud notice on their websites.

Ignore unsolicited contact: do not give your personal information or financial details to people you do not know. Pay extra attention before you reply to emails or messages on social media offering financial advice or investment opportunities.

Be vigilant to promising returns: if it sounds too good to be true, it probably is.

Pay extra attention to past performance: a snapshot of past performance is hard to verify and it can be easily faked. Even if it were true, the performance presentation could be subject to limitations and bias, such as sample bias and always remember past performance is no guarantee of future results.



Tiger Brokers (AU) Pty Limited is an execution-only platform. we provide no trading advice about the merits or risks of the investments or their suitability. That means it will be entirely the client’s decision of which stock they shall invest in and when to trade.