New Zealand Warns of Pump-and-Dump Scam Targeting Kiwi Investors

The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko has issued an urgent warning to New Zealand investors about a growing pump-and-dump scam that uses deepfake advertisements and impersonated business leaders to lure victims into fraudulent trading schemes.

The warning coincides with World Investor Week, which aims to educate and protect investors. According to John Horner, FMA Director of Markets, Investors and Reporting, the scam represents a dangerous evolution of online impersonation tactics targeting everyday investors.

As we begin World Investor Week, aimed at educating and protecting investors, it is timely to remind Kiwi investors about this latest version of the . We have issued a new warning, said Horner. This current scam uses social media advertisements featuring impersonated business leaders, encouraging investors to join a fake investor chat group. The FMA first raised its concerns about the impersonations in a public warning issued 19 August 2025, and has received further information showing the scam is part of a global network of scams aimed at market manipulation.

How the Scam Works

The FMA reports that scammers are running pump-and-dump operations through Facebook and Instagram ads impersonating well-known New Zealand business figures. These ads direct victims to WhatsApp or similar messaging platforms, where they join “investment club” chat groups run by fake mentors.

Once inside, members are initially encouraged to purchase shares in major companies like Nvidia or Tesla to build trust. Over time, they are guided toward investing in small-cap companies listed on overseas platforms. The scammers use coordinated purchasing to artificially inflate the share price — the “pump.” Once prices rise, they trade off their own shares — the “dump” — leaving unsuspecting investors with significant losses when prices collapse.

Following the losses, scammers often contact victims again under the guise of “recovery agents,” promising refunds or compensation in platform for personal information, ID documents, or additional fees — a secondary recovery scam designed to extract even more money.

FMA Response and Cross-Border Coordination

The FMA says it has received numerous complaints, with multiple victims losing significant sums. However, Horner warned that the reported cases likely represent only a fraction of the total impact.

These complaints are likely only the tip of the iceberg. Because these impersonation pump and dump scams play out over days and weeks, it’s possible there are others happening in New Zealand right now, with the scammers potentially pivoting to another company’s shares, Horner said.

The regulator has notified local banks and impersonated companies and is coordinating with overseas regulators, including authorities in the United States and China, as some of the manipulated stocks are listed on NASDAQ and other global platforms. The (IC3) has also issued warnings about similar frauds operating internationally.

How to Recognize and Avoid Pump-and-Dump Scams

• Be skeptical of social media ads promoting investment opportunities — especially those featuring well-known business figures or financial commentators.
• Do not engage with unsolicited investment messages or group invitations, particularly through WhatsApp or Telegram.
• of anyone offering financial advice by checking the Financial Service Providers Register (FSPR).
• Be cautious of time-sensitive or “urgent” investment opportunities. Scammers use fear of missing out to pressure victims.
• Only follow investment advice from licensed financial advisers and reputable institutions.

What to Do If You’ve Been Scammed

• Stop engaging with the scammers immediately and block them on all platforms.
• Report the scam to WhatsApp or the relevant social media channel, and notify the FMA.
• Contact your bank immediately if you shared account details or made payments.
• If you installed remote access software, contact an IT professional to remove it and check for malware.
• Contact IDCare for assist securing your identity if you shared personal documents or information.
• Notify your trading platform or sharebroker if you acted on fraudulent investment advice.
• Report spam messages to the Department of Internal Affairs and viewk support from Victim Support (0800 842 846).

Horner urged investors to remain vigilant and take extra care when considering new investment opportunities. If an organisation is offering investment tips through social media, be cautious. Report any suspicious activity to the social media channel, to the company involved and to the FMA, he said.

FMA’s Broader Mission

The FMA emphasized that protecting investors is central to its mission. One of the FMA’s functions is to promote the confident and informed participation of businesses, investors, and consumers in the financial markets, Horner stated.

The agency continues to raise public awareness of fraudulent tactics to make New Zealand a hard environment for scammers. Our aim is to make New Zealand an unattractive place for scammers to operate, by raising awareness of scam methods and encouraging investors to stop and think carefully before making investment decisions that might be driven by a scam, he said.