‘Pump and dump’ activities under scrutiny

TheStar Sat, Mar 24, 2018 08:00am - 6 years View Original


The Securities Commission’s (SC) warning to investors over “pump and dump” scams over the week came about one year after Bursa Malaysia issued the same caution in a circular to the heads of dealing and compliance of stockbroking companies last March.

According to some market observers, warnings about “pump and dump” activities are timely and appropriate, considering the fact that there are now more new investors entering the local equity market.

“The regulators need to create awareness about the existence of these kind of speculative activities, particularly for new investors, many of whom are still learning the ropes of investing in shares and stocks,” one analyst with a local brokerage says.

“What’s more, some new investors tend to start with low-priced stocks – which are the main targets of ‘pump and dump’ perpetrators – in the hopes of seeing their money grow before proceeding to invest in higher-priced stocks,” he adds.

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