Investor Alert: Multi-Stock Pump-and-Dump Investigation

Four US-listed small caps fell by as much as 93% in days after being pumped through deepfake social ads and closed WhatsApp groups. This report sets out the mechanics, the evidence and the routes to recovery.

By AQG Investment TeamUpdated

Executive summary panel setting out the scam, the victims and the response in the multi-stock pump-and-dump investigation

Executive Summary

The Scam

Coordinated pump-and-dump schemes targeting small-cap Chinese stocks listed on U.S. exchanges, using social media manipulation and impersonation tactics.

The Victims

Thousands of retail investors lured through fraudulent Facebook ads and WhatsApp groups, promised guaranteed returns of 15-25%.

The Response

Morris Kandinov LLP conducting contingency-fee investigation with support from SEC, FBI, and FINRA enforcement actions.

Catastrophic Financial Impact

$3.7B — Market value wiped out in July 2025 across seven targeted companies

300% — Year-over-year increase in FBI complaints related to ramp-and-dump frauds

93% — Maximum single-day price collapse experienced by targeted stocks

1. The Anatomy of the Alleged Pump-and-Dump Schemes

In the summer of 2025, a sophisticated and widespread series of "pump-and-dump" schemes targeting U.S.-listed, small-cap Chinese companies came to light, resulting in catastrophic losses for retail investors. National law firm Morris Kandinov LLP has launched investigations into several of these cases, including those involving Park Ha Biological Technology Co., Ltd. (NASDAQ: PHH), Top KingWin Ltd (NASDAQ: WAI), PicoCELA Inc. (NASDAQ: PCLA), and EPWK Holdings Ltd (NASDAQ: EPWK).

1.1 Overview of the Scam Operations

The WhatsApp and Social Media Trap

The primary mechanism for recruiting victims was through fraudulent advertisements on popular social media platforms like Facebook and Instagram. These ads featured deepfake videos of well-known financial figures and directed users to join closed WhatsApp investment groups.

"Scammers created a powerful 'fear of missing out' among genuine members, who were led to believe they were part of a select group receiving privileged, high-return investment advice."

The groups were populated by bots, fake accounts, and paid affiliates who engaged in scripted conversations to build hype and false consensus around specific stock picks.

Impersonation of Reputable Financial Institutions

Scammers frequently posed as licensed financial advisors from well-known firms such as Merrill Lynch or Capital Wealth Planning, LLC. They used professional-sounding titles and official-looking marketing materials to bolster credibility.

Guaranteed Returns Promise: Victims were promised returns of 15-25% within days

The "Pump" Phase

Scammers aggressively promoted specific stocks as "can't-miss" opportunities, spreading false rumors of impending acquisitions or partnerships to create artificial urgency.

The "Dump" Phase

At pre-determined signals, orchestrators executed coordinated sell-offs, causing stock prices to collapse by 90% or more within minutes.

1.2 Specific Allegations for Each Company

  • Park Ha Biological Technology · Ticker: PHH · Key Allegations & Red Flags: • 93% price collapse on July 8, 2025 • Promoted via fraudulent Facebook ads leading to WhatsApp groups • Part of cluster that lost $3.7 billion in market value
  • Top KingWin Ltd · Ticker: WAI · Key Allegations & Red Flags: • Over 80% price collapse in July 2025 • Company delisted from NASDAQ • Price surge not supported by fundamental developments
  • PicoCELA Inc. · Ticker: PCLA · Key Allegations & Red Flags: • Targeted by "Wealth Trading Circle VIP16" WhatsApp group • Scammers impersonated "Chief Strategist at Merrill Lynch" • 84% price collapse from $8.81 to $1.35
  • EPWK Holdings Ltd · Ticker: EPWK · Key Allegations & Red Flags: • Identified as target of similar pump-and-dump scheme • Promoted through fraudulent social media ads • Disconnect between revenue growth and low valuation

1.3 Evidence and Victim Accounts

First-Hand Testimonies

Victims describe being lured by Facebook ads into WhatsApp groups where scammers posed as licensed analysts.

Public Petitions

Change.org petition calls for FBI and SEC investigation into PHH scam activities, with organized victim collaboration.

Trading Pattern Analysis

Extreme price volatility shows classic pump-and-dump signatures: parabolic rises followed by catastrophic collapses.

Professional Trader Testimony

"Even with my professional background, I was convinced by the seemingly legitimate materials and saw my investment double before it crashed to zero."

A senior UK bank employee lost £13,000 to a sophisticated scam involving deepfake videos of financial experts promoting Pheton Holdings (PTHL).

2.1 The Role of Morris Kandinov LLP

Investigation into Securities Fraud Claims

Morris Kandinov LLP is conducting a comprehensive investigation into potential securities fraud claims, gathering evidence, interviewing victims, and analyzing trading data to build strong cases against perpetrators.

Contingency Fee Basis: No upfront costs for investors. The firm only collects fees if successful in recovering money for clients.

Investigation Scope

  • • PHH, WAI, PCLA, and EPWK cases
  • • Related schemes involving PTHL, EDHL, CIGL, LXEH
  • • Pattern analysis of fraudulent activities
  • • Identification of responsible parties

Contact Information

Website: moka.law/case-contact-form/

Email: [email protected]

Phone: 619-780-3993

Contact: Leo Kandinov, Partner

FBI

Public service announcement and 300% complaint increase

SEC

Securities fraud enforcement and investor protection

FINRA

Regulatory oversight and red flag identification

Class Action Lawsuit Potential

Morris Kandinov LLP's investigation is the precursor to filing class-action lawsuits on behalf of victims. These suits can provide financial compensation based on violations of federal securities laws, particularly Rule 10b-5 of the Securities Exchange Act of 1934.

2.3 Potential Remedies and Outcomes for Victims

Financial Recovery

Settlements or court judgments providing monetary compensation to victims based on their documented losses.

Example: China Liberal Education case resulted in $214 million seizure.

Rescission of Trades

Courts may order defendants to repurchase worthless stock from victims at original purchase prices.

This equitable remedy cancels fraudulent transactions and restores parties to pre-fraud positions.

Offshore Recovery Challenges

Transnational nature of fraud presents enforcement challenges, but international cooperation enables asset seizure.

Priority: U.S. agencies actively pursue offshore fraudsters through international law enforcement cooperation.

3. Morris Kandinov LLP: Firm Background and Track Record

3.1 Firm Profile and Expertise

Morris Kandinov LLP

National Securities Litigation Firm

Specialization

  • • Securities fraud litigation
  • • Investment loss recovery
  • • Shareholder rights protection
  • • Class action representation

Recognition

Top 25 Securities Firms by ISS (2024)

Ranked by Institutional Shareholder Services for excellence in securities litigation

Firm Philosophy

"Recovering investment losses and protecting shareholder rights" is the firm's primary mission. The team understands the financial and emotional toll of securities fraud and is committed to helping victims recover their money while holding perpetrators accountable.

"The firm's work is a critical component of the fight against securities fraud, with significant impact on the lives of the investors it represents."

3.2 Proven Track Record in Securities Cases

2024 ISS Recognition

Legal award ceremony

Ranked in the top 25 securities firms by Institutional Shareholder Services, a leading provider of corporate governance solutions. Recognition based on case volume, recovery amounts, and professional reputation.

Substantial Recoveries

Financial recovery

Long history of securing significant monetary recoveries for investors victimized by securities fraud. Experienced team with deep understanding of complex legal and regulatory issues in securities litigation.

Previous Successful Investigations

Complex Securities Fraud Cases

The firm has successfully handled numerous complex securities fraud cases, demonstrating expertise in investigating and litigating sophisticated financial crimes.

Cases include pump-and-dump schemes, accounting fraud, insider trading, and other securities violations.

Class Action Leadership

Experienced in leading class action lawsuits that provide efficient and cost-effective recovery for large groups of victimized investors.

Class actions enable recovery even when individual losses might be too small to justify separate lawsuits.

Multi-Jurisdictional Expertise

National presence with attorneys licensed in multiple states, providing comprehensive coverage for securities litigation across different jurisdictions.

This broad geographic reach enhances the firm's ability to represent investors nationwide.

4. Financial Analysis of the Involved Companies

4.1 Park Ha Biological Technology (PHH)

Stock Performance & Volatility

Extreme Price Swings

  • • IPO Price: $4
  • • Peak Price: $40 (10x increase)
  • • Collapse: Below $1 (-90% from peak)
  • • 52-Week Range: $2.82 – $41.49

Market Cap Disconnect

Briefly exceeded $1 billion valuation despite minimal revenue, completely detached from fundamental performance.

Financial Health & Red Flags

Key Metrics

  • • Annual Revenue: $2.38 million
  • • EBITDA: $0.82 million
  • • EPS: $0.019
  • • Price/Sales: 294.21
  • • Price/Book: 465.29

Extreme Overvaluation

Price-to-sales and price-to-book ratios indicate significant overvaluation, classic pump-and-dump characteristics.

4.2 Top KingWin Ltd (WAI)

Stock Performance & Volatility

High Volatility Indicators

  • • Weekly Volatility: 13.96%
  • • Daily Surge: 4.84% (July 1, 2025)
  • • Trading Volume: 1.52M shares
  • • 1-for-25 Reverse Stock Split (May 2025)

Financial Health & Delisting

Financial Distress

  • • Net Loss: $663,702 (latest quarter)
  • • Liabilities: $5.88 million
  • • Debt-to-Equity: 5.7%
  • • Minimal revenue growth

NASDAQ Delisting

Delisted from NASDAQ following catastrophic price collapse, a significant red flag for investors.

4.3 PicoCELA Inc. (PCLA)

Dramatic Price Collapse

Extreme Volatility Pattern

  • • All-Time High: $8.81 (Feb 20, 2025)
  • • Crash Low: $1.35 (Mar 5, 2025)
  • • Decline: 84.7% in 13 trading days
  • • 52-Week Range: $0.3710 – $9.8000

Financial Instability

Poor Performance Metrics

  • • Net Loss: $479,921 (recent quarter)
  • • Profit Margin: -61.18%
  • • Return on Equity: -91.35%
  • • EPS: -$0.13

Consumer Alert Issued

Washington State Department of Financial Institutions issued public alert about "Wealth Trading Circle VIP16" WhatsApp scam targeting PCLA investors.

4.4 EPWK Holdings Ltd (EPWK)

Price Manipulation Pattern

Classic Pump and Dump

  • • Surge: $4.50 to $26.00 (April-May 2025)
  • • Collapse: Back to $5.00 (-80% from peak)
  • • No fundamental catalyst for surge
  • • Heavy social media promotion

Financial Distress Indicators

Balance Sheet Weakness

  • • Net Loss (2022): $3,405,919
  • • Short-Term Liabilities: $10.16M
  • • Short-Term Assets: $1.75M
  • • Negative Debt-to-Equity Ratio

Liquidity Crisis

Cash and short-term investments ($375,600) insufficient to cover projected cash burn of $2.10 million for next year.

Financial Analysis Summary

PHH

-93% — Price collapse from peak

P/S Ratio: 294.21

WAI

-80% — Price collapse from peak

NASDAQ Delisted

PCLA

-87% — Price collapse from peak

Profit Margin: -61.18%

EPWK

-80% — Price collapse from peak

Negative Debt-to-Equity

References & Sources

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