In brief
- ASIC is warning Australians to be wary of sophisticated 'pump and dump' scams using fake images of experts.
- In just the last two weeks, 16 Australians have lost more than $2.7 million to these types of scams.
Sixteen Australians have lost more than $2.7 million combined in the past two weeks amid a surge in reports of "pump and dump" scams using impersonations of prominent financial experts to lure victims.
The Australian Securities and Investments Commission (ASIC) is warning Australians to be extremely cautious of investment tips received through social media and messaging apps such as WhatsApp.
ASIC has received multiple reports of scammers exploiting the identities and likenesses of respected finance industry figures and celebrities to draw people into messaging groups, where they are then provided with stock tips and encouraged to invest.
In pump and dump scams, fraudsters artificially inflate the price of an asset by generating misleading hype, often on social media, before selling their own holdings, causing the price to crash.
Victims are then left with shares that are potentially worth only a fraction of what they paid.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
While pump and dump scams have been a concern for some time, ASIC commissioner Alan Kirkland said AI is "supercharging" these types of scams.
"With AI, it's much easier to generate a fake endorsement video from a celebrity or from a finance expert that looks like it's the real person making a recommendation when it is in fact fake," he told SBS News.
Kirkland said older Australians appear to be the most common targets of these scams, likely because they're more likely to have savings.
Tom Piotrowski, NAB's head of market insights, is among a number of high-profile industry figures whose image has been used in scams.
He told SBS News it was "heartbreaking" to see.
"When you spend so much of your time trying to communicate to people how to approach and engage in investment markets — when you participate in that journey of education — to have this sort of thing happening is incredibly heartbreaking."
'A stock that does actually exist'
Pump and dump scams differ from other investment scams because they can trick victims into investing in genuine shares on real financial exchanges through legitimate brokerages.
"With lots of other investment scams, they're actually tricking you into putting money into something that doesn't exist," Kirkland said.
"With these types of scams, scammers are getting you to invest in a stock that does actually exist. Often it's overseas, but they're really thinly traded stocks, so not many people are buying and selling.
"They get you on board so they can drive up the value of the stock. They then sell out their shares. They make a lot of money, but everybody else loses out."
According to ASIC, a recent pump and dump scheme saw a share price soar to around $15.70 before plummeting to around $1.40 afterwards.
Australians lost $837.7 million to investment scams in 2025, according to the National Anti-Scam Centre.
What to watch for
You should be suspicious of any advertisement online that involves a celebrity or finance expert spruiking an investment. That, in itself, should be a warning sign, Kirkland said.
"If they then try and convince you to join a private forum or a private chat group on an app like WhatsApp, that is also a big red flag."
In general, he said you should be cautious about making any investment choice based on a recommendation from somebody you've never met.
He suggests taking your time with investment decisions and avoiding feeling pressured into acting quickly. It's also important to check the credentials of the person you're dealing with and look into the investment you're being encouraged to make.
The government's Moneysmart website also encourages Australians to be suspicious of paid advertising of investments, any rush of influencer endorsements, unsolicited emails or messages, and a rush of commentary in forums.
Piotrowski said reputable financial experts would not approach people directly and encourage them to buy a single stock.
"Firstly, it's illegal, but from a reputational perspective, it's just not the sort of thing that would be done," he said, adding that if something sounds too good to be true, it generally is.
He also suggests asking any financial adviser for their Australian Financial Services (AFS) number — a unique identifier issued by the government to businesses that provide financial services — and checking it against ASIC's registry.
By law in Australia, people recommending specific shares or stocks, must hold an AFS with ASIC.
ASIC advises victims of scams to contact the government's Scamwatch service and their own bank.
For the latest from SBS News, download our app and subscribe to our newsletter.
