'Pump and dump' activity is when a person buys shares in a company and starts an organised campaign to increase (or 'pump') the share price. They then sell (or 'dump') their shares and make a profit, while the other shareholders suffer losses as the share price falls.
People running a 'pump and dump' often use social media and online forums to create a sense of excitement about a stock or to spread false news about the company's prospects. This excitement and interest artificially drives the price up as they lure investors.
Pumping shares for profit may be market manipulation, which is illegal. Investors caught up in market manipulation may face charges. All misconduct should be reported to ASIC.
Read our tips on how to spot a pump and dump scheme, to avoid losing your money.