00:00I made some initial investments in the first two weeks of May.
00:04The stock performed well, so she invested more.
00:07I lost all of my savings, and my family also lost a significant proportion of theirs.
00:14And she's not the only one.
00:16Bloomberg identified about 70 small public companies whose trading patterns later showed signs of pump-and-down behavior.
00:23All of them went public on U.S. stock exchanges over the past couple of years, with the help of U.S. investment banks.
00:29The stock price crashes have erased some $16 billion in market capitalization.
00:35So what exactly is a pump-and-dump?
00:37Well, you might already be familiar with the concept from the Oscar-nominated movie The Wolf of Wall Street.
00:43In this type of pump-and-dump investment, a faceless advisor who seems legitimate reaches out about an opportunity to invest in a hot, newly IPO'd company.
00:53They convince the investor to buy a stock, which artificially inflates the price until the stock is dumped.
00:59The dump happens when the stock manipulators who purchase shares at low value sell their now valuable shares at an inflated rate,
01:07leaving unsuspecting investors with what is now essentially a worthless stock.
01:12She messaged me every day stating that the price of the share has gone up.
01:17And it's no longer Leo calling from Wall Street.
01:19The wolves are all around the world.
01:21With artificial intelligence, social media, and smartphones, scammers can operate now from any corner of the world,
01:28which makes it hard for U.S. regulators to find them, let alone stop them.
01:32The SEC requires companies to submit audited financial statements and answer often lengthy regulator questions before launching an initial public offering.
01:42These standards are not designed to tell the public whether an investment is good or bad.
01:47Rather, it helps investors to understand the financials and risks that came with each investment.
01:52Federal prosecutors in September 2025 charged two men, including the now former co-CEO of Austin Technology.
01:58In a securities filing, Austin Technology Group said it was cooperating with the investigation.
02:04They did not respond to our request for comment, and the trading of the stock has been halted on Nasdaq.
02:09Investment banks also play a key role in bringing companies public.
02:13Bloomberg analysts have identified 30 companies that help foreign firms to become public on the Nasdaq capital market exchange.
02:20Those stocks later showed unusual trading patterns.
02:23Jamie Selway, who is the chief of SEC's division that oversees trading on market, said,
02:28Underwriters should not bring toxic foreign companies to U.S. markets.
02:33Nasdaq declined to comment.
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