Possible (MU) stock trading scame
If this has happened to you, please respond so we can raise visibility to this being a thing.
TLDR: If you've been "friended" by someone on Reddit/elsewhere because of your ostensible trading activity who then offers you trading advice, "friendship", perhaps asks if you have Webull or if your account can buy certain stocks, and also says they have an upcoming ("insider") trade that you won't want to miss out on -- you almost certainly do in fact want to miss out on it. See "Warning Signs" below if you don't want to read Details, and "This Is The Scam".
Details:
Zestyclose_Tea5159 (later identified himself as "Kalman D") messaged me on May 1, asking if I owned MU stock (I do). We started chatting, he seemed to have a reasonable short-term strategy with MU, and asked if we could move to Discord.
After chatting for a ~week on Discord, mostly about stocks (and some personal) and him making a few trading suggestions, he proclaimed that we were friends and that we should move to WhatsApp, because that's where he talks to friends. At some point I sent him a voice note (I was driving), but he said he couldn't listen to it because he was watching the stock market.
He shows a screencap of his trading account with $5M in it. Now he's going to take me under his wing. He made a few trade suggestions, which I took part in, and then he asked me for a screen cap for proof of trade, which I thought was a bit odd. He asked if I had Webull setup, I said no. He said he would recommend Webull because of its charting and that he would teach me how to use it, and that it also has zero trading fees.
At the same time, he started telling me about a friend he has at a big trading firm who has given "spectacular" returns on suggestions in the past, and that a new suggestion was forthcoming and he would let me in on it. I didn't get around to setting up Webull, and he asked if my existing brokerage account could trade particular stocks like KXIN or HCAI, I checked and no, I couldn't. He said those stocks are more restricted stocks because they are or have been easily manipulated. But Webull doesn't have any restriction on these types of stocks.
That's when my alarm bells started to ring. I then asked if he'd want to do a facetime call, and he said no. He sent me (disappearing after 1 view) pictures, but "couldn't" do a facebtime call, and never gave a reason why. When I pressed him on it, he started sending me screenshots of him having a conversation with someone else that he's "getting chewed out" for talking to me about this magical upcoming trade. I explained why I thought it was a scam. He then threatened to sue me (which gave me a pretty good laugh).
This Is (Probably) The Scam:
"Befriend" someone, gain trust through talking to them for a while, establish credibility, recommend trades, escalate "friendship" overtures while also slowly and methodically probing for their ability to buy stocks. Build excitement about an upcoming exclusive trade. Do this with as many people as you can, dozens or hundreds. Farm them from high-performing stocks where people likely have higher funds available and may be less risk adverse. Wait for a manipulable stock to hit a low, then "release" the trade to your farmed friends, and once they've all bought, sell at the top. Pump and dump.
Warning Signs:
- Getting messaged on {Reddit} and being asked if you own the position, or how much you own.
- Being asked to move to a different chat platform.
- Calling you a "friend" without really getting to know you all that well.
- Offering you trading advice based on "friendship."
- Asking if you can buy certain types of (restricted) stocks or if you have Webull.
- Offering you an "in" on an exclusive upcoming trade
- Refusing to talk on video
Why This Nearly Worked On Me
I was suspicious of someone calling me a "friend" after a week or two, but the guy said he was recently divorced, that he is on Reddit for stock trading and "looking for hot asian women." Honestly I've always thought most (not all) non-professional day traders are probably guys either in unhappy marriages or are single, and are probably pretty lonely, so I chalked the friendship thing up to that. He introduced each friendship/trading escalation slowly over time, so nothing felt completely overwhelming on its own. If he hadn't let the "restricted, manipulable" stocks bit slip, I may have missed it. He'd follow-up and ask how my mother was doing (I'd mentioned she was sick), take interest in things about my day -- it seemed like a genuine person, and I suppose there's a slim possibility everything he said is true, but I really doubt it.
I imagine this is something that happens beyond MU, so hopefully if this is a scam this can be raised to awareness beyond here
