Experienced financial trader experiences significant loss of £13k due to persuasive pump-and-dump scheme
In the world of financial markets, a new form of scam has emerged, using deepfake technology and social media platforms to lure unsuspecting investors. One such victim was James, a 39-year-old senior professional from London, who lost thousands of pounds in the Pheton Holdings (PTHL) pump and dump scheme.
The scam began with a deepfake video on social media, featuring a well-known financial figure, such as a fabricated endorsement by fund manager Anthony Bolton. These videos appeared professional, mimicking legitimate market news and updates, and falsely suggested strong investment potential in Pheton Holdings. James, intrigued by the advertisement on Facebook featuring what he believed to be the founder of Revolut, was drawn into the scam.
Scammers also funneled potential victims into private WhatsApp or Telegram groups, creating a controlled environment for manipulative communication. In these groups, scammers propagated false rumors, such as a major corporate acquisition or partnership involving Pheton Holdings, intensifying the hype and urging group members to buy shares. James, who initially invested £1,000, continued to invest as the share price of Pheton Holdings kept rising, eventually losing £13,000 over the course of six weeks.
James' father, too, fell victim to an online investment scam around five years ago, losing £42,000. However, this scam was not AI-based, but a different form of fraud. James believes that most of the other members of his WhatsApp investment group were bots or other scammers.
Estimates suggest that there could be hundreds of similar WhatsApp groups used for such scams. James is not alone in his loss; some victims of the Pheton Holdings scam lost over £250,000, with James' uncle also losing over £100,000 in the same scheme.
The Pheton Holdings case exemplifies how AI-generated deepfakes and social media tactics can be used to inflate micro-cap stock prices fraudulently and then cause prices to crash once the scammers sell off their share holdings. As these technologies advance, such scams are becoming increasingly prevalent and harder to detect, making it crucial for investors to remain vigilant and sceptical.
James, who wished to remain anonymous, stated that it was embarrassing to have been scammed, especially as he works in financial markets. However, he hopes that sharing his story will serve as a warning to others. As the world of finance evolves, so too must our strategies for protecting ourselves against such scams.
[1] Financial Times: Pheton Holdings Pump and Dump Scam [2] BBC News: Deepfake Scams on the Rise [3] The Guardian: The Rise of AI-Driven Financial Scams [4] Forbes: How Deepfakes Are Changing the Face of Scams
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