Couple Faced Over RM1.5 Million Loss After Stock Tip Scheme

A Singaporean couple are facing more than $500,000 (over RM1.5 million) in paper losses after they were persuaded to invest about $650,000 in a Hong Kong listed company, in what they believe was a coordinated pump and dump scam.

The couple, a homemaker and a sports coach in their 40s, initially entered an online investment learning group after the wife responded to a Facebook advertisement offering a free five month trial for people seeking to learn about trading. She was subsequently added to a WhatsApp group called V73 Learning To Shape The Future, where members received regular investment lessons and stock recommendations.

The group was led by individuals using the names Professor Chen Kah Ming and Ella. Chen presented himself as an experienced investment professional and regularly discussed market opportunities, while Ella was described as an assistant who provided updates and instructions to members about when and how much they should invest.

The couple initially approached the recommendations cautiously. Their confidence grew after an early investment of about $40,000 in CMBC Capital Holdings generated a profit of roughly 20 per cent after they sold the shares following instructions from the group.

When Chen later recommended CMBC Capital Holdings again, he reportedly described the stock as a rare opportunity and said it could rise to HK$50 from around HK$5. The couple subsequently committed approximately $100,000 of their savings and borrowed about $500,000 from banks to increase their investment.

The shares initially moved higher, reinforcing their belief that the strategy was working. But the rally did not last. As the share price began falling, members of the group were reportedly encouraged to hold their positions, with the decline attributed to short sellers and temporary market volatility.

The couple eventually lost access to the chatroom on Aug 2, when Chen and Ella stopped responding. By then, the value of their holdings had fallen by about 85 per cent. The stock was trading at 68 Hong Kong cents as of Sept 2, according to the report.

CMBC Capital Holdings has separately warned that its name may have been misused in connection with suspected investment scams. The company said it had not authorised third parties to use its name to solicit investment arrangements and reported the matter to Hong Kong authorities and regulators.

Singapore fraud prevention expert Simon Liu said the available evidence showed characteristics associated with a ramp and dump arrangement, while stressing that a definitive conclusion about the specific scam could not yet be made. The Singapore police have also warned of a resurgence in pump and dump scams involving overseas listed companies, with at least 21 cases reported since July 1.

The warning is relevant beyond Singapore. Malaysian investors are increasingly exposed to overseas equities, social media investment communities and informal trading groups that can create an illusion of professional expertise. The Singapore case shows that investors should not treat a real listed company, a legitimate brokerage account or early trading profits as proof that an investment recommendation is genuine. For Malaysian market participants, independent verification of the promoter, the investment thesis and the source of the trading recommendation remains critical before committing capital or taking on debt.