(BFM Stock Exchange) – The Autorité des Marchés Financiers warns the public against the so -called “kettle” scam which consists in promoting actions in advertisements or private messaging loops in order to make their lessons artificially swell.

The Autorité des Marchés Financiers (AMF) warned Friday against scams with investment circulating on private messaging, where individuals are encouraged to buy actions in order to artificially handle their course.

In detail, fraudsters, already shareholders of a company, convince savers to buy titles to make the price climb it. Once the course is noted, they resell their own actions, causing a sudden fall in value and leaving individuals with losses.

The “Pump and Dump”, an old stock market scam

This practice, called “kettle” or “pump and dump” in English, has been the subject of several reports with the French stock market gendarme.

The term “kettle” refers to the fact that the action suddenly rises like water which boils in a saucepan.

“As soon as the sale is carried out, the price of the title drops suddenly, resulting in significant damage among investors,” said the AMF.

Individuals injured “are found with an important position bought at high prices on an illiquid title”, that is to say a financial instrument, in this case an action, which is difficult to sell, for lack of buyers.

The crooks then seek to reassure their victims by promising them help to recover or compensate for the lost money.

The promise of fast gains

According to the AMF, several savers claim to have joined such discussion groups after clicking on online advertisements or on social networks, in particular via WhatsApp. Others would have been added without their consent. All were offered to invest in actions, often American, with the promise of quick gains.

“After an increase phase, these actions finally collapsed and, today, these people indicate to the AMF that they have lost most of their investment,” reports the regulator in a press release.

The Autorité des Marchés Financiers calls on savers to verify that anyone offering them a placement is a provider authorized to do so by consulting black lists or white lists freely accessible on the AMF website.

(With AFP)