Concerns grow over the increasing threat of investment fraudtargeting retail investors. Addressing this issue on LinkedIn today (Monday),the CEO of Webull Securities (UK), Nick S., highlighted that pump and dumpschemes are becoming more complex and causing greater financial harm.While the tactic is not new, he noted that recent versionsinvolve more sophisticated methods, making them harder to identify and moredamaging when they occur.Enforcement Cases Highlight Problem ScopeTwo enforcement cases highlight the scope of the problem. In2016, theU.S. Securities and Exchange Commission sued a UK-based trader for hackingbrokerage accounts and manipulating stock prices, causing losses of nearly$300,000. More recently, fourindividuals in Australia pleaded guilty to coordinating a pump and dump schemevia Telegram, targeting penny stocks between August and September 2021. Thegroup now faces potential prison sentences and million-dollar fines.How Pump and Dump Schemes WorkPump and dump schemes involve artificially inflating theprice of a stock to attract buyers, before rapidly selling off the holdings toprofit from the surge. Once the stock is dumped, its price collapses, oftenleaving late investors with heavy losses.Changing Tactics in FraudNick S. said recent cases show a more advanced pattern offraud. Criminals are reportedly using credentials stolen through phishingattacks to access brokerage accounts. They then target thinly tradedNASDAQ-listed stocks, accumulating large positions without drawing attention.Once they control enough shares, they promote the stock on platforms likeWhatsApp and other social media sites.In these promotions, fraudsters pose as analysts claiming tohave insider information. They push stories about upcoming medical approvals orcompany takeovers to build hype. As the stock price climbs—from, for example,$2 to $10—retail investors are drawn in, believing they are buying into aregulated and legitimate opportunity.“Victims see "regulated" stocks on legitimateexchanges and assume safety,” Nick S. wrote. “But they don't realise the stockvalues themselves are entirely unsecured.” According to him: “When the dumphappens, prices can fall 90% in seconds and life savings can vanish instantly.”He said some investors have lost their life savings inrecent weeks as a result of these schemes.Calls for Stronger Regulatory ActionNick S. also criticised the current state of investorprotection and awareness. He said traditional warnings and educational effortshave failed to prevent the spread of these scams. “The warnings are too niche,easily overlooked,” he said, adding that it can be extremely difficult toconvince victims they are being misled.He called on the Financial Conduct Authority (FCA) to takestronger action. He suggested that brokers should be allowed to block access tosuspicious stocks without fear of backlash from users or the media. He alsoproposed the creation of a daily intelligence-sharing system between brokersand regulators to support faster responses and prevent harm.“We’re committed to being part of the solution,” he said ofWebull UK’s stance, “but this requires industry-wide collaboration andregulatory support.” He concluded by asking the public for thoughts on furthermeasures to protect retail investors.This article was written by Tareq Sikder at www.financemagnates.com.