Currently, illegal stock recommendation activities are deeply intertwined with telecom fraud, constantly evolving with new tactics, significantly increasing their concealment and deceptiveness. Perpetrators create fancy names, fabricate identities, and disseminate various stock trading information through communication channels like phone calls and text messages, or online platforms such as Weibo, WeChat, Douyin, Kuaishou, Xueqiu, Zhihu, and stock forums. They use false, exaggerated, and sensational propaganda to attract investor attention, then set up stock recommendation traps with promises of high returns and profits to defraud investors of money. To help the general public further improve their awareness, the Sichuan Securities Regulatory Bureau,reveals common disguises of illegal stock recommendations and teaches how to see through various stock recommendation scams at a glance.

Typical Case

Illegal Stock Recommendation Disguised as Selling Trading Software

Investor An, who was new to stock trading, learned one day about a quantitative trading software called "Qihai Quant," which claimed to allow personal securities accounts to be linked to the platform, enabling programmatic trading functions such as market prediction, automatic stock selection, and timing trades without human intervention, thereby continuously improving trading success rates. After paying a 10,000 RMB annual service fee, An received a promise of a refund if no profit was made during a three-month trial period. After trading for one month, An found that the quantitative trading platform automatically selected 5 stocks for trading daily with an extremely low win rate, leading to continuous account losses, and thus requested a refund. The platform explicitly refused, citing that the trading cycle was not long enough and the trial period had not reached three months. Subsequently, An continued using the platform for trading, which still resulted in losses. An then demanded a refund from the platform under the threat of reporting to regulatory authorities but was met with evasion, refusal, and even verbal abuse and threats from platform staff.

Case Warning: As a hot concept in stock market investment, quantitative trading attracts much attention and pursuit from investors. Lawbreakers seize the opportunity to package poorly-made illegal stock recommendation software or scam software as quantitative trading software to sell to investors. In reality, they are engaged in illegal stock recommendation or fraudulent activities; the related software cannot help investors make profits.

Summary of Common Tactics

1. Social Media Stock Recommendations: Perpetrators frequently share various financial information or market analysis, review, and live trading information on social platforms such as WeChat, Weibo, Douyin, Kuaishou, Xiaohongshu, QQ, Xueqiu, Knowledge Planet, and stock forums to attract investors to follow and pay attention, then seize the opportunity to recommend stocks or commit fraud.

2. Phone Call/Text Message Stock Recommendations: Perpetrators obtain investor contact information through illegal channels, then cast a wide net with bait via phone calls and text messages, tricking investors into downloading illegal apps, clicking on illegal links, or joining various investment groups, after which they precisely execute stock recommendations or fraud.

3. Live Streaming Stock Recommendations: Perpetrators create or utilize internet platforms to open stock trading live rooms, engaging in stock investment analysis on live streaming platforms under names like "financial host," "stock market expert," or "securities investment advisor," attracting investors to attend classes, learn, and follow, then proceed with stock recommendations or fraud.

4. Trading Software Stock Recommendations: Perpetrators leverage popular concepts like quantitative trading, programmatic trading, artificial intelligence, AI, and big data to package and promote trading software with timing, stock selection, and automatic trading functions, inducing investors to pay for the software to conduct stock recommendations or fraud.

5. Stock Trading Training Stock Recommendations: Perpetrators package and promote various securities experts and investment gurus, selling courses such as "investor education," "investment and financial management," and "stock trading training" to investors, or holding stock trading lectures, report meetings, analysis sessions, and strategy sessions, directly or indirectly engaging in stock recommendations or fraud after payment.

Prevention Guide   

1. Nature Identification: Any institution or individual that provides paid individual stock investment analysis, predictions, or recommendations to clients or investors without obtaining the securities investment consulting business license issued by the China Securities Regulatory Commission (CSRC) is engaged in illegal stock recommendations. Any claim that can help investors achieve low-risk, high-return, high-success-rate investments in the stock market and induces investors to transfer money is fraud.

2. Qualification Verification: Investors should log on to the official website of the CSRC (www.csrc.gov.cn) to check if the relevant institution is listed in the "List of Legitimate Institutions," and also log on to the official websites of the Securities Association of China, the China Futures Association, and the Asset Management Association of China to verify the professional qualifications of relevant personnel.

3. Information Verification: For anyone claiming or identified as an employee of a securities company, futures company, fund company, private equity institution, or overseas investment institution who solicits clients and recommends stocks online, their identity, business, platform, and account authenticity should be verified in advance through the official channels of the relevant institutions.

To stay away from illegal stock recommendation scams, remember that "there's no such thing as a free lunch," and adhere to the "Four Checks" and "Four Don'ts."

"Four Checks": Check qualifications, check identity, check business, check accounts.

"Four Don'ts": Don't trust easily, don't click, don't transfer money, don't follow.

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The above information is for investor education purposes only and does not constitute any investment advice. Investors should not rely solely on this information to make decisions. We strive for accuracy and reliability in this promotional content but do not guarantee its accuracy or completeness, nor do we assume any responsibility for losses arising or potentially arising from the use of this information.