Pump-and-Dump Schemes Surge 330% on Wall Street

New York traders sound alarm on growing stock market scams that have cost them tens of thousands

Published on Mar. 10, 2026

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Data obtained by CBS News New York Investigates shows a massive 330% increase in pump-and-dump schemes on Wall Street over the last year, with two New York traders reporting losses of tens of thousands of dollars from the scams. Scammers buy cheap stocks, then convince others to buy big to pump up the price, allowing the scammers to sell at a huge profit and leave victims with plummeting share values.

Why it matters

The rise in pump-and-dump schemes highlights the vulnerability of individual investors, especially those new to day trading, to sophisticated stock market manipulation tactics. As more people have entered the market, scammers have found new avenues to exploit, draining savings and shaking confidence in the fairness of the financial system.

The details

According to the report, scammers start by buying shares of a cheap stock, then use social media and messaging platforms to convince others to buy the stock in large quantities. This artificial demand drives up the stock price, allowing the scammers to then sell their shares at a huge profit while leaving other investors with plummeting share values. The SEC chairman has testified that steps are being taken to protect investors, but the schemes have continued to proliferate, with one Peekskill trader losing $74,000 and a Long Island man losing $96,000 in the MSGY stock crash.

  • Over the last year, pump-and-dump complaints have jumped 330% on the Nasdaq and New York Stock Exchange.
  • In late January, the 'Professor' on a WhatsApp chat group urged members to buy the little-known stock MSGY, leading to a price surge that then crashed the next day.

The players

D.J. Hennes

A managing director with the accounting firm KPMG who says more people are invested in the stock market than ever, leading to increased popularity of day trading and vulnerability to scams.

Paul Atkins

The Securities and Exchange Commission Chairman who has testified that steps are being taken to protect investors and prevent pump-and-dump schemes.

Masonglory Limited

The little-known, foreign company whose stock (MSGY) was the target of a pump-and-dump scheme that cost investors tens of thousands of dollars.

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What they’re saying

“More people are invested in the stock market than ever. Sort of [like] day trading with Robinhood. It's more popular to be involved in these things in the short term, and then social media has allowed these messages to go out more quickly to more people.”

— D.J. Hennes, Managing Director, KPMG (CBS News New York)

“Life is about continuous learning and progress. Let's grab this chance and get one step closer to our goals in life.”

— The Professor (CBS News New York)

What’s next

The SEC chairman has testified that steps are being taken to protect investors and prevent pump-and-dump schemes, but the schemes have continued to proliferate. Regulators will likely need to take further action to crack down on these scams and restore confidence in the fairness of the financial markets.

The takeaway

The surge in pump-and-dump schemes highlights the vulnerability of individual investors, especially those new to day trading, to sophisticated stock market manipulation tactics. As more people have entered the market, scammers have found new avenues to exploit, draining savings and shaking confidence in the financial system. Stronger regulatory oversight and investor education will be crucial to combating these predatory practices.