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Social media influencers charged with manipulating stock prices 

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A group of social media influencers has been charged in the US with conspiring to manipulate stock prices after they promoted themselves as successful traders online and hyped market-traded securities to followers. It is alleged that, after the group posted “false, positive” information about each stock in order to “artificially drive up its price”, they “secretly” sold their shares. The scheme purportedly netted the influencers $114m (£90m). The social media influencers have now been charged with conspiracy to commit securities fraud. If found guilty, they could face a maximum of 25 years in prison. 

Unfortunately, such so-called “pump-and-dump schemes” are becoming more common, with fraudsters using social media to spread false or misleading information to “pump” up the price of a stock or an asset. Once it has hit a desired high, those behind these schemes quickly “dump” their shares at the inflated price. This can result in investors losing significant amounts of money. Such schemes can be especially convincing when backed by ‘credible’ social media influencers who flaunt their luxury lifestyles online.  

At KP Law, we help people who have been affected by investment fraud, including pump-and-dump schemes to get their money back. 

Protect yourself from investment fraud

It can be tempting to invest quickly if you are scared that you might miss out on a great opportunity. But a reputable organisation will never pressure you into doing so. Take some time to research the company and scheme before making a significant financial decision. This includes checking the Financial Conduct Authority’s (FCA) register to make sure the company and advisor are regulated by the FCA. This gives you a level of protection if things go wrong. 

Be aware that some scammers create fake websites to make it appear as if you are investing with a regulated company. If you are in any doubt – and especially if it seems too good to be true – contact the company using their legitimate website (not the one the advert links to) to make sure they run the scheme. To trick unsuspecting victims, fake cryptocurrency and other investments are advertised on social media. Be wary of fake reviews and endorsements created by scammers that provide a false sense of security. 

It might not be new wisdom, but the adage “if something seems too good to be true, it probably is” still applies. Fraudsters know they must convince people to invest, so they often promise fantastic, guaranteed returns and exotic investments (e.g., film, wine, and cryptocurrency) to get potential “investors” excited. But even smaller, less glamorous investments can be fraudulent, so you should always research any potential investment before committing. 

If you are investing a significant amount of money, it is always worth speaking to an independent financial advisor first. This does not guarantee that you won’t fall victim to investment fraud. At KP Law, we have clients who have used UK-regulated financial advisors and have still received negligent or criminal advice. However, if you use a UK regulated advisor, you will be able to seek compensation if something goes wrong. 

Standing up for victims of investment fraud

Defendants are smarter and better resourced than ever before. As such, when it comes to legal support, it is vital to appoint a solicitor with the experience and skill to take them on. At KP Law, our Investment Fraud & Mis-Selling team has all the expertise needed to win, even against the most aggressive defence lawyers.

We also understand that the outcome of your case is likely to have profound and long‐term consequences on your life. Providing a cool head in a crisis, we will remove the burden from your shoulders as we fight for justice. What’s more, because we offer no-win, no-fee funding arrangements, you will benefit from expert legal support and complete peace of mind without having to worry about costs.

Crucially, because we know what to look for when investigating a case, we can often substantially increase a claim’s value. Our solicitors have even won cases where victims had been told that there was little to no chance of compensation. Investigating and pursuing claims in the UK and beyond, if you have lost money due to fraudulent or negligent investment advice, contact us in confidence to find out how we can help.

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