Warning

Beware of pump&dump schemes via social media and messaging apps

The Commissione Nazionale per le Società e la Borsa (“CONSOB”, Italian Securities and Exchange Commission) warns investors about the risks associated with the increasingly widespread phenomenon of investment proposals circulating on social networks such as Instagram and Facebook and on messaging apps such as WhatsApp. These proposals, often presented by fake analysts, financial experts or self-styled advisors, can conceal scams, with a real risk for investors of losing their money.

A particularly insidious scheme is known as pump&dump. Here's how it works: scammers promote the purchase of shares often having low cost (known as penny stocks), usually listed on the U.S. market (Nasdaq), promising quick and significant gains. To make their proposals seem credible, they often use the brands and names of authorized investment firms or other financial sector operators, sometimes even impersonating prominent figures from Consob.

Once users – convinced of the possibility of making large profits in a short time – start buying the shares, the scammers ask them to send screenshots (photos of the screen of the smartphone or other electronic devices used to make the transaction) as proof of the executed transaction. This allows them to coordinate buy orders, artificially inflating the stock price (pump). When the value reaches a high level, the promoters sell off their shares in bulk, thereby making a large profit; at the same time, they cause a sudden price crash (dump), leaving other investors with significant losses.

Pump&dump schemes, the Commission points out, may also occur in relation to the trading of crypto-assets on dedicated trading platforms.  

• How to recognize malicious initiatives? What are the warning signals?

Consob urges caution regarding the following suspicious behaviours:

• unsolicited messages or social media communications containing investment advice, often accompanied by invitations to join WhatsApp or Telegram groups
• promises of significant gains on little-known or recently listed securities
• pressure to invest immediately, citing alleged imminent market developments
• requests for personal data or screenshots, sometimes with false promises of refunds in the event of losses

• What can you do to protect yourself?

It is essential to act with caution and common sense. Before investing, always check:

• the reliability of the person proposing the investment
• the truthfulness of the information received
• whether there are any warnings on the Consob website, in the “Watch out for scams!” section, where you can also find useful tools to identify fraudulent initiatives.

Consob also draws attention to the fact that spreading messages or communications on social networks containing false or misleading information, such as to induce investors to engage in conduct that could constitute market abuse, is punishable under the relevant regulations in force in the competent jurisdictions and may constitute fraud, with possible criminal consequences.

28 October 2025