The Federal Bureau of Investigation (FBI) is warning social media and messaging service users to be weary of a scheme known as the “ramp-and-dump.”

The scam involves stock manipulation, where criminals target United States investors through online engagement via social media advertisements or messages promoting an “investment club” of fellow investors, some of which may be bots or fake accounts.

These promotions typically direct people to secure messaging apps where the group operates, the FBI wrote in a statement. To appear credible, perpetrators might impersonate legitimate brokerage firms or well-known stock analysts.

“They secretly control a large volume of a low-priced stock and coordinate efforts to inflate its price (’ramp up’) by encouraging investment club members to purchase shares over a period of several weeks or months,” the bureau explains. “Once the price is artificially elevated, the criminals sell off (’dump’) their shares at a profit, leaving unsuspecting investors with significant losses as the stock value collapses.”

So far this year, the FBI has noticed at least a 300% increase in victim complaints referencing ramp-and-dump stock fraud from 2024.

Investors can protect themselves from these potential schemes by recognizing the following indicators:

• Unsolicited investment tips received via “accidental” text messages or social media advertisements linking to online investment clubs, often hosted on security 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 like 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

“If anyone requests your personal information, access to your financial account(s), or offers a financial benefit in exchange for sharing your information or opening an account, consider this a red flag,” the FBI said. “Your information could be used to open an account through which another party can engage in manipulative activity.”

Those who suspect they have been victimized by investment fraud can report the incident to the FBI’s Internet Crime Complaint Center (IC3) here.