Thousands of American investors have [1]lost millions of dollars to sophisticated pump-and-dump schemes involving small Chinese companies listed on Nasdaq, prompting the Justice Department to declare the fraud a priority under the Trump administration's white-collar enforcement program.

The scams recruit victims through social media ads and WhatsApp messages, directing them to purchase shares in obscure Chinese firms whose stock prices are artificially inflated before collapsing. Since 2020, nearly 60 China-based companies have conducted initial public offerings on Nasdaq raising $15 million or less each, with more than one-third experiencing sudden single-day price drops exceeding 50%. In one recent case, seven traders earned over $480 million by defrauding 600 victims who purchased shares in China Liberal Education Holdings.



[1] https://www.msn.com/en-us/money/companies/obscure-chinese-stock-scams-dupe-american-investors-by-the-thousands/ar-AA1GO9qW