If your clients use messaging apps like WhatsApp, remind them to ignore any stock recommendations they may receive. Rather than being helpful, these messages are likely part of a recent and widespread pump-and-dump scam.
“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," Gerri Walsh, FINRA's senior vice president for investor education, said in a statement Wednesday.
The regulator issued an investor alert, warning consumers to be wary of any messages promoting stocks sent through WhatsApp and other common messaging apps. Fraudsters allegedly sent out messages touting a specific stock, prompting consumer purchases that “pump” up the price. Then the organizers of the scam dump the stock at its peak price, leaving investors holding the bag.
Specifically, over the last few weeks WhatsApp uses have been inundated with text messages boasting about Avra, Inc. FINRA noted that the messages sent hyping the microcap stock appeared to be sent from people within popular brokerage firms plugging the company and claiming the stock was "going to double in the next few days."