The Financial Industry Regulatory Authority (Finra) is warning investors about a surge in the use of messaging tools like WhatsApp by pump-and-dump scammers.
Over the last few weeks, WhatsApp users were flooded with messages that appeared to be from people at well-known brokerage firms touting the stock of Avra, claiming it was "going to double in the next few days".
In an investor alert, Finra says that this is just the use of a new tool for an old scam: pump-and-dump, where fraudsters use spam to induce buying before selling shares at their peak.
Gerri Walsh, SVP, investor education, Finra, says: "Scammers keep up with the times. If you are using a messaging app and receive a tout claiming that a stock is poised for explosive growth, don’t respond—just delete."