Pat Foran explains how scammers are making fake websites and forums that use the logos of trusted companies for a scheme known as ‘pump and dump’ fraud.
If you’re investing, it’s essential to do your homework or consult with a financial advisor to ensure your money is secure.
Scammers are now setting up fake websites and forums, using the logos of well-known companies for something called “pump-and-dump” fraud.
“Pump-and-dump” scams occur when criminals create excitement around a stock to inflate its price, but once you buy in, they sell off their shares, leaving you with investments that may be worthless.
You’re made to think the stock will soar, but when it crashes, they pocket the profits while you lose your money.
Israel Klait of Richmond Hill Israel Klait from Richmond Hill uses his mobile phone. He claims he lost $260,000 in a ‘pump-and-dump’ scam.
Klait reached out to expressing concern that Wealthsimple should have alerted him and other clients about criminals misusing their logos in social media scams.
A spokesperson provided this statement:
“Fraudsters are becoming more aggressive and sophisticated every day. We’ve seen an increase in social media scams lately, and we were very sorry to hear about Mr. Klait’s experience. In just three months alone my team at Wealthsimple has reported over 10,000 fraudulent ads to Meta while we’re one of many financial institutions tackling this issue,” stated the company.
“To help our clients we regularly issue warnings through our app, via email, and on social media platforms. We collaborate with industry groups along with government bodies and law enforcement agencies aiming against scams on behalf of our clients. Plus we’re constantly developing new tools designed for protecting our clients against various types of frauds.” Wealthsimple will never recommend specific stocks or securities for purchase; we advise Canadians always be cautious about financial advice sounding too good.”
‘Pump-and-dump’ scam A ‘pump-and-dump’ scam shown on Instagram.
Klait wanted others to learn from his experience; losing $260k means he’s now reevaluating his retirement plans.
“For two weeks I couldn’t sleep at night replaying all my decisions over again trying figure out where I went wrong. It’s really upsetting,” he stated.
If someone tells you can double your money fast , that’s usually reason enough for concern since most investments should be held long term gaining value gradually.
Also be cautious of social media accounts using logos from trusted financial firms as these might not be legitimate.
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‘It seemed real’
“When I signed up to Wealthsimple it was almost immediately that ads started showing up on Instagram,” said Israel Klait from Richmond Hill. Klait had previously kept his investments with a major Canadian bank but recently switched his funds to Wealthsimple due to a promotional offer. The transfer went without a hitch, but after he made the change he noticed an ad on Instagram for a Wealthsimple trading forum promising tips on making money in the stock market. “Those ads featured the Wealthsimple name and logo. It looked authentic,” Klait said. Klait joined the online group and soon after received advice to buy a specific stock. He did so and saw his investment double in value. “I bought it and then waited. Then I got a message: ’Oh you know what this is not going to work out, just sell the stock.’ I sold it and ended up making $14,000 from this transaction,” he shared. Israel Klait and Pat Foran Israel Klait from Richmond Hill talks with ’s Pat Foran. Feeling confident in their guidance, Klait then made a much larger investment. Unfortunately, things took a turn for the worse quickly. “As soon as I bought (the stock) that day five minutes later it crashed. It dropped from $1.68 U. S. down to ten cents and at that moment I just panicked,” Klait recalled. Klait realized he had fallen victim to a pump-and-dump scam and lost $260,000 in total. He mentioned that when he tried reaching out to the forum again, it was completely shut down. “I attempted getting back into the group chat and everything had vanished. The phone numbers looked like they were deleted,” he said.Israel Klait of Richmond Hill Israel Klait from Richmond Hill uses his mobile phone. He claims he lost $260,000 in a ‘pump-and-dump’ scam.
Klait reached out to expressing concern that Wealthsimple should have alerted him and other clients about criminals misusing their logos in social media scams.
A spokesperson provided this statement:
“Fraudsters are becoming more aggressive and sophisticated every day. We’ve seen an increase in social media scams lately, and we were very sorry to hear about Mr. Klait’s experience. In just three months alone my team at Wealthsimple has reported over 10,000 fraudulent ads to Meta while we’re one of many financial institutions tackling this issue,” stated the company.
“To help our clients we regularly issue warnings through our app, via email, and on social media platforms. We collaborate with industry groups along with government bodies and law enforcement agencies aiming against scams on behalf of our clients. Plus we’re constantly developing new tools designed for protecting our clients against various types of frauds.” Wealthsimple will never recommend specific stocks or securities for purchase; we advise Canadians always be cautious about financial advice sounding too good.”‘Pump-and-dump’ scam A ‘pump-and-dump’ scam shown on Instagram.
Klait wanted others to learn from his experience; losing $260k means he’s now reevaluating his retirement plans.
“For two weeks I couldn’t sleep at night replaying all my decisions over again trying figure out where I went wrong. It’s really upsetting,” he stated.
If someone tells you can double your money fast , that’s usually reason enough for concern since most investments should be held long term gaining value gradually.
Also be cautious of social media accounts using logos from trusted financial firms as these might not be legitimate.
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