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Red Sea Fortune/Wisdom Capital Management Stock Scam Investigation 

January 11, 2024  |  Penny Stocks / Securities Fraud

If you have suffered losses with Red Sea Fortune Investment or Wisdom Capital Management, please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your investment loss recovery options.

Red Sea Fortune/Wisdom Capital Management Stock Scam Investigation 

In or about late 2023, various fraudsters used false and misleading advertisements on social media websites (including Instagram) whereby the fraudsters posed as being associated with Cathie Wood or Ark Invest. Those who clicked on the links were directed to various WhatsApp chat rooms. In these chat rooms, investors were introduced to people using the names Jess Parker and/or Ava Evans, who posed as investment advisers.

These investments advisors offered a free trial of stock trading advice, after which certain members would be offered to join a VIP group and pay additional fees and commissions for the investment advice. The investors in these groups were encouraged to open new brokerage accounts to able to do certain overseas trading, including trading on the Hong Kong stock exchange.

Through these WhatsApp chat rooms, the advisors going by the names of Jess Parker or Ava Evans would distribute stock picks and encourage the investors to make the same trades, and to post screenshots of the trades. These advisors would also then give a price target as to when to place the sell orders.

Initially, the stock picks distributed by the advisors going by the names of Jess Parker or Ava Evans were successful, thereby lulling investors into to a false belief that the trading was legitimate. Then, investors were asked if they would be willing to invest more, and in turn further specific instructions were given for larger orders. Unfortunately for investors, they were being lulled into a stock scheme referred to as a "pump and dump". Once investors placed larger orders at the recommendation of the advisors going by the names of Jess Parker or Ava Evans, the stocks plummeted in value and investors were left with nearly a complete loss.

Some of the Hong Kong stocks that were used to facilitate the pump and dump scheme including, but are not limited to, Super Strong Holdings, Ltd. and DreameastGroup, Ltd.

Super Strong Holdings and DreamEast Group Investment Loss Recovery Options

Kons Law is investigating various paths to recovery for Super Strong Holdings and DreamEast Group investors against the US-based brokerage firms at which the trades were placed. Broker-dealers in the United States have strict regulatory obligations to have a supervision and surveillance systems designed to prevent and detect securities frauds like pump and dump schemes. In addition, broker-dealers must conduct surveillance on penny stocks (in particular foreign penny stock trades) in order to comply with various anti-money laundering (AML) obligations. Broker-dealers that failed to detect and stop trades from being diverted in an illegal pump and dump scheme may have liability.

How Do I Pursue Red Sea Fortune/Wisdom Capital Stock Scam Losses

If you have suffered losses in Red Sea Fortune or Wisdom Capital Stock scams, or any other stock scams whereby the fraudsters were posing as Cathie Wood or Ark Invest on social media, you may be able to pursue recovery of your losses through FINRA arbitration or securities litigation. Please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your investment loss recovery options.

Kons Law Firm represents investors throughout the US in securities arbitration and litigation matters. To learn more about the Firm’s securities litigation and FINRA arbitration practice, please visit www.investmentfraudattorneys.com.

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