FBI Warns Michigan Residents Of Stock Trading Scam

We are guaranteed to deal with scams until the end of time because some people think it is easier to manipulate others and take from them than to work their own job. They might consider it to be work and even call themselves smarter than others but realistically they are just preying on innocent people that's don't know better.

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It seems as if the scams will never end, as soon as people begin to catch on to the method, they pivot to a new one. This keeps them fresh and has the people on their toes all the time. For the most part, scammers are using text messages, emails, and social media to attack victims.

Recently, the FBI warned residents in Michigan and other states about the dangers of a stock trading scam that had risen to the tune of 300% just this year. The "ramp-and-dump" scam is known to be financial destructive to victims which has caught the attention of the FBI.

Have You Bought Any Stocks Recently? You May Have Been Scammed

Here's a breakdown of the scam according to Mlive:

The schemes involve scammers making unsolicited contact with targets through social media and text messages advertising “investment clubs.” The club offers investment advice that encourages users to buy specific stocks. The target, however, is unaware that the people behind the scam own a large volume of the stocks.

As more people are convinced to buy the stock, it drives up the price. Once the stock price is artificially elevated, the scammers sell their stock at a profit, but the other investors can lose their money as the stock price falls following the scammers’ sale.

The FBI says to do the following to keep yourself safe from the stock scams:

• Unsolicited investment tips received via “accidental” text messages or social media advertisements linking to online investment clubs, often hosted on secure messaging apps.
• Claims from well-known financial advisors or wealth managers offering exclusive stock recommendations through these online clubs.
• Pressure to act quickly based on a supposed market-moving event — such as a company breakthrough, new technology, or government approval.
• Urgent pitches to purchase low-priced stocks in new or emerging companies, often paired with promises of dramatic price increases or guarantees to cover any investor losses.

As always, be cautious with providing personal information over the phone or through text/email as this could be used in a magnitude of ways.