Stock-buying scams draw warning from France watchdog

abdelaziz Fathi

France’s financial markets regulator, the Autorité des Marchés Financiers (AMF), alerted investors that scams related to stock markets are beginning to circulate, with criminals capitalizing on the situation to run a range of financial scams.

The AMF had spotted fraudulent offers to invest in stocks of blue-chip companies at a price below their official price. It also warns about an uptick in internet promotions claiming that shares of certain companies will dramatically increase.

The watchdog says it continues to receive reports of victims falling prey to scams offering to buy shares in listed companies through fraudulent platforms posing as regulated providers of “savings accounts”. It also advised members of the public to be wary of stock recommendations given on social media and messaging applications.

These are typically from overseas ‘brokers’ who target potential victims offering to sell what often turn out to be worthless or high risk shares. These callers can be very persistent and extremely persuasive, and their activities have resulted in considerable losses for some investors, the authorities said.

The AMF statement further reads:

“Retail investors receive investment proposals, for example, in a “GAFA savings account with guaranteed capital and indexation on the performance of Google Amazon Facebook Apple shares”, or a “Tesla Apple Facebook savings account”, “diversified savings accounts” based on shares of companies that are sometimes not even listed, fake “share purchase contracts” or “high frequency trading” (HFT) savings accounts. Fake intermediaries also offer to buy Française des Jeux (FDJ) shares at an allegedly discounted price. The AMF had already warned the public about these fraudulent proposals to buy FDJ shares in November 2019.”

Among the most prevalent scams attempting to take advantage of the coronavirus outbreak were fraudsters urging people to invest in new stocks related to the disease.

Another common scam is “pump and dump” schemes related to some penny stocks where fraudsters try to boost its price by sharing positive, but fake, information. In this case, they claim that a company managed to detect coronavirus cases or to develop a new cure to prevent the infection.

Phishing and other malicious email campaigns have also been running rampant on internet platforms since the outbreak began. Emails and websites promising vital information about keeping safe from the pandemic attempt to steal passwords and personal information, including credit card numbers.

It is not just the novice investor that has been deceived in this way, the AMF says, as many of the victims have been successfully investing for several years. They are thus advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports.

Read this next

Digital Assets

Elwood integrates Fireblocks to further connect digital asset ecosystem

“As a first port of call, the integration of Fireblocks will enhance the portfolio management system experience for clients, providing users with a comprehensive view of their current and historical digital asset positions across all venues, including their Fireblocks movements and balances.”

Industry News

OKX to open office in Australia, starts rivalry with Kraken in Formula 1

“Our ambition is straightforward – to become the leading crypto platform in the world. We see Australia as an indispensable part of this strategy and a key growth market.”

Executive Moves

Freemarket taps Greg Sherwin as CTO of international payments and FX-focused fintech

“At Freemarket, we are focused on providing the best optimized cross-border payments and currency exchange service to our customers and Greg’s exceptional technology expertise will help us deliver even more for our customers and support their future growth and success.”

Digital Assets

Boerse Stuttgart Digital secures BaFin authorization for crypto custody

“This is the first time that an established market participant has been licensed to hold cryptocurrencies in custody without any acquisitions. This completes the unique infrastructure we offer: of all the traditional service providers operating in the European crypto market, we are now the only one-stop-shop that’s fully regulated by BaFin in Germany for brokerage, trading, and custody of digital assets. For banks, brokers, asset managers, and family offices, this makes us the infrastructure partner of choice.”

Executive Moves

Capital.com hires Simone Manni as Head of Marketing, Europe

“I am proud to join Capital.com, a dynamic, fast-growing FinTech company harnessing technology to disrupt traditional access to financial markets. My focus over the next few years will be to grow Capital.com’s market share across western Europe and to gain a stronger foothold in countries like Italy and Germany which boasts a mature and sophisticated trading community.”

Retail FX

Axi extends partnership deal with Manchester City

FX broker Axi, previously known as AxiTrader, has renewed its flagship sponsorship deal with soccer giant Manchester City.

Digital Assets

Russia delays digital ruble pilot to May

Russia has postponed its central bank digital currency (CBDC) pilot indefinitely, which was originally scheduled for April 1, as it awaits specific legislation to be voted before the “crypto ruble” trial.

Executive Moves

Scope Markets promotes James Hughes to head of marketing

Belize-based FX and CFDs brokerage Scope Markets has promoted James Hughes, who until recently was its head of brand, to take on an expanded role as the company’s global head of marketing.

Retail FX

Fraudsters clone Financial Commission’s website, two ex-members under suspicion

The Financial Commission, an industry-specific dispute resolution service that caters to the financial services industry, today announced that it believes a clone website has been impersonating its membership roster.

<