The Scam Costing People Millions and How to Protect Yourself

You’re discussing a recent market dip in a social media investment forum when a message arrives. Someone claiming to represent a famous investor such as Bill Ackman or Cathie Wood has noticed your comments and offers to include you in an exclusive investment group where they trade tips on accumulating extraordinary returns. Their profile looks legit, complete with professional credentials and up-to-date market analysis. Soon, you’re in a private WhatsApp group with other “successful investors,” feeling like you’ve been specially selected for an insider opportunity.

However, it’s all part of an elaborate scam the Financial Industry Regulatory Authority (FINRA) says has been exploding across digital platforms.

Investment Scams Succeed More Now, Despite Warnings

According to the FTC, Americans lost $5.7 billion in 2024 to investment scams, a 24% increase from the previous year and a 50% jump over two years. Most concerning is that scammers are becoming even more effective. The percentage of people who reported losing money to fraud jumped dramatically, from 27% in 2023 to 38% in 2024, about a 40% increase in the success rate for scammers.

Thus, despite officials and financial experts warning numerous times about ID theft and fraud, scam artists have only become more successful in recent years. Marti DeLiema, assistant research professor at the University of Minnesota, Twin Cities, told a FINRA roundtable on fraud that she and her colleagues have found that most educational initiatives can only have so much impact. “Maybe the biggest limitation of consumer protection education is that it has … short-term effects,” she said.

One reason is simply that scam artists aren’t sitting still as people are educated about the previous generation of scams. “Fraud tactics are constantly changing,” Duygu Başaran Şahin, a researcher at the RAND Center for the Study of Aging, said in the same FINRA discussion. But there’s also something counterintuitive at work: “People with higher financial literacy and with more education were more likely to engage with scammers,” he said.

Also, according to the FTC, contrary to stereotypes, young people reported losing money to fraud more often than older people—44% were 20-29 years old, while only 24% were 70-79 years old.

Even experienced investors with market knowledge are often duped by the increasingly sophisticated techniques scammers employ. The examples abound: A construction company owner who regularly followed market trends losing half his savings, a Nashville couple with investment experience getting taken for $1.3 million. A February 2025 survey of 2,000 high-net-worth individuals by Saltus in the U.K. found that a third (33%) had been victims of fraud and other cybercrime.

How Wall Street Guru Scams Operate

So, it’s not just the elderly, naive, or inexperienced who are taken in. What’s more, guru impersonation scams are often as carefully staged as any Broadway production. The first step typically involves identity theft, as scammers create convincing online impersonations of well-known financial figures like Bill Ackman, Cathie Wood, or even Warren Buffett. These fake profiles appear on platforms where potential victims already spend time discussing investments. The scammers might begin to engage the target by commenting on market trends or offering general advice.

Once they’ve established basic credibility, scammers move the conversation to private messaging groups on platforms like WhatsApp or Telegram. Once there, the targets witness what appears to be a community of successful investors sharing tips on earning substantial profits. In reality, most or all of these “members” are fake accounts operated by the scammers. These manufactured success stories build a sense of FOMO (fear of missing out) that drives victims to participate, while the scammers pepper in mainstream advice to develop and keep credibility.

As trust deepens, the scam takes the exploitative turn it was always headed for. The targets are encouraged to invest in low-priced, low-volume stocks, often penny stocks, on foreign exchanges where prices are more easily manipulated. This follows the classic “pump-and-dump” pattern, where fraudsters manipulate stock prices through misleading promotional campaigns.

The Bottom Line

Investment scams continue to evolve at an alarming pace, and with the help of AI, fraudsters are becoming more sophisticated at creating their bogus scenarios, while cryptocurrencies help make their ill-gotten earnings untraceable afterward.

Meanwhile, we’re ever more accessible to them. “Fraudsters can get us with emails, texts, social media, even phone calls still 24/7,” said Gary Mottola, research director for the FINRA Foundation. “The odds [of getting duped] have increased dramatically with technology [that] the fraudsters [can use to dupe the unwitting].”