Fraud Risk Scheme:
A technique to artificially inflate the price of an asset (e.g., a stock) through false recommendations or massive orders, followed by rapid selling at the high price, leaving other investors with losses.
Detection:
Abnormal order volume: Spike in concentrated buying over a short period, without economic justification
Disproportionate orders: Unusual transactions relative to the asset's historical volume
Suspicious price movements: Rapid price increase followed by a sharp decline
Media or social signals: Sudden promotion on social networks, forums, newsletters
Concentration of orders from linked accounts or the same brokers
Prevention:
Real-time transaction monitoring: Automated systems to detect abnormal volumes
Prohibition of misleading communications: Tighter control of public recommendations
Severe criminal and administrative penalties for fraudsters
Investor education on the risks of illiquid assets and aggressive promotions
Verification of the legitimacy of investment advice disseminated online
Collaboration between regulators and platforms to identify organized campaigns
Share your feedback:
Have you ever encountered this risk and under what circumstances?
What tools, techniques, and processes are used to detect and prevent it?
