Tencent bans thousands of WeChat accounts for peddling fake stock tips as China's retail investors face volatile market
Tencent, operator of China’s dominant messaging app WeChat, said it blocked 8,000 groups and 4,000 personal accounts in the first half of this year for spreading investment rumours that “disrupted equity trading”.
Individual investors account for more than four fifths of China’s equity trades and some retail investors, who do not have access to professional investment guidance, buy and sell stocks blindly based on rumours circulating on WeChat, which boasts 1 billion users.
Using counterfeit identities, rumour mongers draw retail investors into WeChat groups where they are bombarded with stock tips, according to Tencent. Some purport to be professional investment advisers and charge fees for their guidance, claiming they can accurately predict the movement of some stocks.
Others live-stream their equity trades on WeChat groups or live-stream platforms and convince their followers to buy specific stocks.
Some of the scammers even forge transaction records to lure individual investors to put money into the fake trading platforms, promising high returns and a free trial as bait.