KUALA LUMPUR: The Securities Commission Malaysia (SC) has warned investors over the increase use of blogs, forums and social media platforms to spread false and misleading information on certain companies in order to perpetrate ‘pump and dump’ schemes.
In a statement, the SC said perpetrators would accumulate shares at lower prices before posting positive sentiments about the companies, with the intention to spur interest in the shares in order to drive up its price.
“When unsuspecting investors buy the shares, it gives the perpetrators an opportunity to sell the shares they hold at a profit. Investors who have bought shares at the inflated price will suffer losses when the hype eases,” it said.
The SC and Bursa Malaysia have recently identified a blog ‘Bonescythe Stock Watch’ which was found to have published various articles that contain statements and forecasts that were misleading and deceptive, an offence under Section 178 of the Capital Markets and Services Act 2007 (CMSA).
Following SC’s intervention action, the blog has been removed.
“The SC advises investors to always exercise diligence and verify the legitimacy of information before making an investment decision. Investors are reminded to be cautious of the risk of fraud and when in doubt, to seek advice from persons who have been licensed by the SC,” the regulator said.