“I lost almost $300,000 in four minutes”: How an alleged WhatsApp pump-and-dump scheme played out
A 24-year-old business owner describes how a seemingly professional WhatsApp “investment community” allegedly drove a stock up 900% before it crashed within days.
"I lost over NIS 800,000 (approximately $267,000) in four minutes. I didn't even know stock manipulation like this existed." That is how S., a 24-year-old from central Israel who runs an independent nail salon specializing in gel manicures, describes how she allegedly fell victim to a stock manipulation scheme operated through a WhatsApp investment group focused on U.S.-listed stocks.
The group, called "USA Stocks Community in Tel Aviv," was established in September 2024 and has hundreds of members. According to its description, it provides "educational content, news analysis, analyst recommendations, macroeconomic updates, market commentary and stock analysis," written in Hebrew that appears to have been translated using artificial intelligence. It also states that all content published by the group's managers reflects the views of its research team. To participants, the group presented itself as an educational forum focused on financial literacy and investment analysis.
"I only realized afterward that I'd fallen victim to what is known as a stock pump-and-dump scheme," S. said. "At first, I didn't think it was a scam at all. Someone recommended stocks, and I watched from the sidelines before getting involved. I didn't invest in the first stock or the second. Then I saw trades that appeared successful. I invested and made money. I invested again and made money again. It built my confidence. But the fifth time I invested a much larger amount. Within four minutes, the stock had collapsed by about 90%. It simply crashed. There was no way to get out."
Many WhatsApp groups allegedly involved in stock manipulation appear to follow a similar playbook.
Administrators randomly add hundreds of users, hoping that some will remain in the group and that a smaller number will eventually invest.
According to S., the process began on Facebook.
"I came across an investment group on Facebook, and from there they directed me to WhatsApp groups. The same person who posted on Facebook also continued posting investment recommendations in WhatsApp. Everything looked professional and organized."
Groups of this kind typically operate using the classic pump-and-dump model, an established form of market manipulation that has become easier to execute through social media and messaging platforms.
Operators first identify shares of a thinly traded company, where relatively small buying pressure can significantly affect the share price. They quietly purchase shares themselves before encouraging members of the group to buy, often promising extraordinary returns. As demand drives the stock higher, the organizers sell their holdings at inflated prices, while investors who enter later are left holding shares that rapidly collapse in value.
The stock promoted by the WhatsApp group was NetClass Technology (Nasdaq: NTCL), a Singapore-based technology company that develops software and digital education solutions for schools, universities and other educational institutions.
The group's administrators claimed the company was poised to benefit from growing demand for artificial intelligence solutions in education.
On the evening of June 5, the group's administrator, who identified himself only as "David," posted a message announcing what he called a "Super 500% Investment Plan."
He wrote: "Next week we will launch the Super 500% investment plan. Tonight I will explain the operational details so we can achieve returns beyond expectations more safely and help every new member earn enough to cover their family's expenses for the next 30 years. Investing is like going into battle, we need a complete strategy and clear rules to win again and again. If you're just trying it out, making a few hundred or a few thousand dollars won't change your life. Anyone who isn't prepared to commit fully and follow the plan shouldn't join."
NTCL only began trading on Nasdaq in December 2024.
Trading data show that during May, daily trading volume surged to as much as $160 million, roughly 32 times its annual average.
Between the end of May and June 10, the stock climbed about 900%, reaching approximately $2.90 per share. A day later, on June 11, it plunged nearly 90%, falling to roughly 34 cents.
Earlier that month, the WhatsApp group claimed the stock would rise from around 30 cents to $9.
Shortly before the collapse, members were told:
"Today is the last opportunity to increase your position because a gain of more than 50% is expected on Friday. You should use all available capital to maximize short-term profits with a very high degree of certainty. A similar opportunity may not come again for at least a year."
Group administrators also encouraged participants to remove trading restrictions from their brokerage accounts, prepare available cash and even sell existing investments, including gold, stocks and investment funds, to concentrate their money in the supposedly high-conviction opportunity.
Suspicious activity
One striking feature of the WhatsApp group was the large number of participants who repeatedly praised the administrators and described impressive investment gains.
This raised suspicions that at least some of the accounts were not genuine and were intended to build credibility and encourage others to invest.
"I noticed that many people in the group kept responding, cooperating and talking about how much money they were making," S. said. "Afterward I spoke with other people who were also hurt. I'm definitely not the only one."
Even after NTCL collapsed, the group reportedly continued promoting new opportunities.
One day later, administrators wrote that another stock in which they had begun building a position was trading around $2 and was expected to reach $9.
NTCL is not the only Singapore-listed company whose shares have allegedly been promoted through similar WhatsApp groups.
Shares of Concorde International Group (Nasdaq: CIGL) have also reportedly appeared in comparable campaigns targeting Israeli investors.
S. ultimately lost NIS 800,000, an extraordinary sum, particularly for someone her age.
"I work incredibly hard for my money," she said. "I didn't earn it so it could be taken from me through fraud. I didn't even know schemes like this existed. Looking back, I understand how easy it is to fall for them when you see people around you who supposedly keep making money."
In Israel, responsibility for investigating securities offenses, including market manipulation, rests with the Israel Securities Authority.
In recent months, the authority has worked with foreign regulators and law enforcement agencies in an effort to curb this type of activity.
Despite those efforts, such schemes continue to operate through social media platforms and messaging apps, using digital communities to recruit investors and distribute what appear to be misleading investment recommendations.
