What happened: WeChat shut down 8,000 groups and 4,000 personal accounts in the first half of this year for spreading investment rumors. The rumor mongers would pose as legitimate investment advisors offering tips in exchange for money. Some of the scammers even used live streaming to lure buyers, China’s popular pastime.
Why it’s important: Small-scale Chinese retail investors have been known to treat the stock market as a casino relying on rumors and fake investment tips which are rife across Chinese social media. Their rise stems from the lack of access to professional investment guidance for retail investors and the restrictions they face in trading on the domestic market due to government capital controls.