The Canadian Securities Administrators (CSA) have issued a warning to investors, telling them to beware of scam artists who are using messaging applications to lure in their victims.
In a statement published on Oct. 20, the various provincial securities commissions warned the public about fraudulent stock promotions that use popular smartphone messaging applications such as WhatsApp to generate investor interest.
"Like other “pump-and-dump” schemes that seek to create artificial interest in a particular stock, these promotions use spam to talk up the benefits of a company and convince people to invest," reads the message from the CSA. "What investors don’t know is that the person or company touting the stock owns a large amount of it. As more and more investors buy shares, the value skyrockets. Once the price hits a peak, the scam artist sells their shares and the value of the stock plummets. Investors are left holding worthless shares."
The CSA says that investors who use messaging applications should ignore any promotional spam they receive and report it to their provincial or territorial securities regulator.