Scams involving money have been widely reported, and one such investment scam works like this (write up taken from Seedly): upon gaining the trust of their victims, the scammers would encourage their victims to buy specific shares on the Hong Kong Stock Exchange, promising them guaranteed profits.
Should the scammers convince enough victims to buy the mentioned shares, the price of the share increases. The scammers, then, sell their portion of shares and disappear with their profits. This sell-off lead to a dip in share price, higher than the price of which the victim invested.
While Mr Budget counts himself as a relatively smart person, I never thought I will be a target of one such scam.
So earlier 2 weeks ago, Mr Budget received a friend request on WeChat from a female contact.
Before this, Mr Budget has a friend who told me that he is in a conversation with someone on WeChat which he identified as a scammer. The “scammer”, would have added him “accidentally” and introduced herself as a stock analyst from Hong Kong.
Throughout his conversation with the scammer, the “stock analyst” would drop a few counter recommendations to my friend, with the promise that those counters will increase in price.
So far, all the stock recommended have all risen in price and have never been wrong. So that intrigued my friend to continue chatting with her to get more “insights”. He is still talking to her until today, and the “stock analyst” has been very patient in engaging with small talks with my friend.
My friend has never made any trades / taken any positions on the stocks recommended so far.
So back to Mr Budget – the day finally arrived when I received a friend request. When the request came, I knew immediately that this could be one of the scammers.
The scammer, added me saying that she added accidentally from her suggested contact list, and proceeded to introduce herself as a stock analyst after some small talks.
To keep my suspicion low, the first few days of chatting involve getting to know me, talking about the weather and other basic conversational topics. I tried to ask her more on Hong Kong’s riot and politics (since she said she’s a stock analyst of HSBC), but she quickly deflected the question. The is probably a sign that this topic is not part of their “playbook” and she wouldn’t know how to answer me.
On the third day of chatting, she suddenly told me that her client made a neat 20% profit on a stock counter – HKEX 3313
Of course, that piqued my interest and I told her that I would have missed the boat and won’t be looking at the counter. She said that the counter will continue to go up another 10%, and it did.
However, I replied that the price doesn’t make sense for me, and she introduced another counter – HKEX 0826.
So I went to take a look at the finances of the company. Tiangong is a relatively large cap company dealing with high speed rail in china, with decent historical financial performance.
In my mind, the scammer will need to make sure that I make a small profit, thereby gaining my trust, before “scamming” me. Since the company’s financials roughly checked out, and it is in the interest of the scammer to ensure that I make a profit, I took a small position on the counter.
Surely enough, the next day, the counter went up by 2-3%.
The scammer also asked me to enter the position at a particular odd lot, so that she can track if I really did enter the said position. She also required me to screenshot my position, which made me even sure that this is 100% a potential scam.
After the next day, she asked me to offload the position, and after minusing the fees, I made a quick 2-3% in gain.
And then she dropped the bomb.
After seeing that I made a profit on the counter I bought, she asked me to prepare S$100,000 to invest in a new counter, which she said will go up by at least 30%.
However, she will only reveal the counter to me the next day at 2pm.
To this, I told her, I do not make investments like this. I would have to look at the counter, study its financials, understand the business roughly, before taking any positions. I told her any investment without looking at the company is gambling.
And she became slightly agitated, saying that this is not gambling, and that the risks are properly managed.
In my mind, I went “what the hell is this justification?”. At that point I realised that she kept asking if I have the money, and if I can make the trade at 2pm, all without telling me the counter.
So I started ignoring her texts and then she stopped texting me.
For those who were scammed, I’d think there are many tale-tell signs that reveal if you are under a scam or not. If something is too good to be true, it is probably too good to be true.
Overall, a very interesting experience, and I manage to make a couple of hundred bucks in just 1 day.
Do you have any similar experiences? Do let us know. 🙂
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