SC warns against ‘ pump and dump’ schemes

> Commission to act against those using online platforms to spread misleading information on companies to invoke a hype over shares

PETALING JAYA: The Securities Commission Malaysia (SC) has warned investors on the growing “pump and dump” schemes, which have been using online platforms to spread false and misleading information on companies to invoke a hype over shares and eventually selling it at inflated prices.

The authority said in a statement that perpetrators operating through blogs, forums and social media platforms would accumulate shares at lower prices before posting positive sentiments about the companies, with the intention to spur interest in the shares in order to drive up its price.

“When unsuspecting investors buy the shares, it gives the perpetrators an opportunity to sell the shares they hold at a profit. Investors who have bought shares at the inflated price will suffer losses when the hype eases,” it added.

Bonescythe Stock Watch is one such online platform identified by the SC to have published various articles containing statements and forecasts which were misleading and deceptive, and seen as an offence under Section 178 of the Capital Markets and Services Act 2007 (CMSA). The blog has since been taken down following the SC’s intervention.

“The SC advises investors to always exercise diligence and verify the legitimacy of information before making an investment decision. Investors are reminded to be cautious of the risk of fraud and when in doubt, to seek advice from persons who have been licensed by the SC,” it said.

Members of the public who have come across any suspicious websites, as well as emails relating to investment advice or any other capital market activities and services, may alert the SC at the contact number 03-6204 8999 or e-mail aduan seccom.com.my, while investors could reach out to the InvestSmart website www.investsmartsc.my and InvestSmartSC Facebook page.