SEC starts international Taskforce to combat fraud cases: focus on 'pump-and-dump' and 'ramp-and-dump' schemes

SEC starts international Taskforce to combat fraud cases: focus on 'pump-and-dump' and 'ramp-and-dump' schemes

SEC launches cross-border anti-fraud task force

The U.S. Securities and Exchange Commission (SEC) has launched a new cross-border task force dedicated to combating financial fraud. The focus of the measures is particularly on the so-called “pump-and-dump” and “ramp-and-dump” schemes.

What are "pump-and-dump" and "ramp-and-dump" scheme?

"Pump and dump" schemes are fraudulent practices in which the price of a stock is artificially inflated in order to then sell it and make a profit, while other investors are left with the loss of their investment. This approach is often designed for targeted market manipulation in which the trust of investors is abused.

In contrast, the "ramp and dump" scheme describes a similar fraud scheme in which the increase in the value of a stock occurs not only through targeted purchases, but also through the spread of false information on social networks and other media. The price is also artificially increased in order to ultimately make profits by selling the shares.

Goal of the task force

The SEC's newly formed task force aims to better understand and combat the complexity and cross-border aspects of such fraud cases. By working with international authorities, the SEC aims to develop a more comprehensive picture of the global fraud landscape and take more effective actions to limit damage and educate the public.

Impact on the financial market

The establishment of this task force is considered an important step to strengthen trust in the markets. The SEC emphasizes that the protection of investors and the integrity of the financial markets are top priority. The measures should not only counteract existing attempts to fraud, but also deter potential perpetrators by increasing the probability of a failed fraud.

Conclusion

By establishing this cross-border task force, the SEC is demonstrating its determination to take decisive action against financial fraud. Investors should be aware of the risks and remain vigilant to avoid falling victim to fraudulent schemes. Collaboration with international partners could prove crucial to maximizing the effectiveness of measures to combat such types of fraud.