Recently, seven Chinese concept stocks including Ostin Technology experienced both surges and plunges on the Nasdaq, causing many investors to lose their life savings. But the saga isn’t over yet – the FBI is currently collecting information from investment victims. A senior financial analyst believes that the level at which Ostin Technology issued stock warrants far exceeds industry standards, suggesting that company management may have been involved in this “pump-and-dump” scam.
“I almost fell off my chair when selling the stocks, it was a wake-up call,” a European retail investor who wished to remain anonymous told the Financial Times, revealing that he lost a “six-figure” amount on Pheton.
Tia Castagno, who runs a high-level executive training business in London, ended up losing all her savings after being encouraged by a seemingly legitimate U.S. investment company to invest in Ostin Technology. She expressed feelings of emptiness and shame, constantly questioning her judgment and likening the experience to having the rug pulled out from under her feet.
On August 18, media outlets such as Wall Street Observations reported that in July, seven Chinese concept stocks traded on the U.S. stock market Nasdaq fell victim to a “pump-and-dump” scam, causing stock prices to plummet by over 80% and a $3.7 billion market cap evaporation.
These Chinese concept stocks include Concorde International, Ostin Technology, Top KingWin, Skyline Builders, Everbright Digital, Park Ha Biological Technology, and Pheton Holdings.
According to the FBI, complaints from victims of “pump-and-dump stock fraud” increased by 300% last month.
Taking Ostin Technology as an example, according to information released on the FBI’s official website, starting around April 2025, individuals impersonating American financial professionals made false statements on social media and messaging platforms, advising investors to buy Ostin Technology (NASDAQ: OST) stocks, promising substantial investment returns.
These false statements and resulting investment activities artificially “boosted” Ostin Technology’s stock price. On June 26, when Ostin Technology’s stock price surged to $9.40, it crashed to a closing price of $0.55 within a day, causing investors to incur significant losses.
Public information shows that Ostin Technology’s stock price fluctuated around $2 in January and February of this year. From April onwards, the stock price started climbing and quickly skyrocketed. For example, on April 15, while most popular Chinese concept stocks were falling, Ostin Technology defied the trend and surged by 299.25%, reaching $3.19. That day, Ostin Technology issued 9.09 million Class A shares along with warrants.
On May 20, Ostin Technology’s stock rose by 2.63% midday, reaching $4.68 in the afternoon. By June 13, the stock had risen over 4% to $6.90. On June 26, the price was driven up to $9.40 before plummeting.
Ostin Technology’s full name is Jiangsu Ostin Opto-Electronic Technology Co., Ltd., established in Nanjing in December 2010, listed on China’s New Third Board in July 2015, and listed on Nasdaq in 2022 as Ostin Technology Group Co., Ltd. Its official website shows Ostin Technology currently owns 4 factories, 7 branches, and 6 systems.
The website also reveals the company’s annual sales numbers up to 2023. 2020 marked a peak in the company’s performance, with revenue increasing from 2011 to 2020. However, from 2021 to 2023, revenue declined, worsening each year.
According to information provided by the comprehensive operation platform of Oriental Fortune Network, Ostin Technology had a net profit margin of -14.63% in the mid-term report of 2023, which further decreased to -19.15% for the full year. The company suffered increased losses in 2024, with a full-year net profit margin of -31.39%. In the first half of 2025, the company continued to face losses with a net profit margin of -27.26%, and a staggering -131.60% return on equity.
Public information also indicates that Ostin Technology exited the Chinese stock market on February 5, 2021.
In the “pump-and-dump” scam involving Ostin Technology, it wasn’t just American investors who suffered losses. The National Fraud Helpline in the UK established a webpage to assist victims of the scam.
Simon Powell, a senior financial analyst from the UK, posted on LinkedIn: “After tracking Chinese concept stock fraud for over 20 years, I now witness how social media is used by Asian scammers to make a hefty profit from gullible and sometimes greedy investors.”
Powell highlighted key events: On April 15, Ostin Technology issued 9.09 million Class A shares, with each share accompanied by two warrants, totaling 1.818 million warrants. The stock price surged on that day. On May 3, OST conducted a warrant exchange, canceling 1.818 million warrants and replacing them with 70.91 million Class A shares, meaning buyers who acquired 9.09 million shares in April now held 80 million shares (909 + 7,091 = 8,000). Buyers collectively paid $5 million, or $0.0625 per share.
Powell suggested that the level at which warrants were issued raised concerns about corporate governance, prompting him to suspect that Ostin Technology’s management may have been involved in the “pump-and-dump” scam.
He also noted that manipulators sold stocks after regular trading hours to circumvent stop-loss mechanisms, which are typically only effective during market hours. A stop-loss is a pre-set price that, when reached, triggers an automatic sale of the stock to control losses.
In Powell’s post, he outlined the basic methods used by fraudulent groups. These groups target retail investors via social media, promising guaranteed returns. They hype up a stock on platforms like WhatsApp, claiming “big news is coming soon” daily, encouraging people to buy more or hold regardless. During the early stage of inflating stock prices, investors indeed earn excess profits and begin to trust their “investment advisors” on WhatsApp.
The groups later advise selling other stocks to “free up funds” to buy the manipulated stocks they control – some even pretend to be retail traders, sharing fake profit screenshots. Once enough potential investors are convinced, the stock crashes, leaving retail traders “rekt.”
Some Ostin Technology investment victims posted videos on Facebook, urging other victims to join a Discord group to collectively contact the FBI and other government agencies, as well as the U.S. Securities and Exchange Commission (SEC) and other financial institutions, to try to recover losses and prevent such scams from happening again in the U.S.
A woman named Maki, who posted the first video in July on Facebook, reported that the Discord group had around 100 members initially. As of the time of writing, the group had grown to 313 members. Discord is an instant messaging social platform that verifies members’ identities via video.
In the video, Maki referred to the Ostin Technology “pump-and-dump” scheme as “organized international crime,” despite denials from Ostin Technology’s management. She expressed disbelief that the board, controlling shareholders, and managers were unaware of the stock’s movement. The stock crashed almost instantly, making it impossible to react in time even with prior knowledge or utilizing stop-loss mechanisms.
“The deceived individuals include those who are completely unaware of investing, as well as financial advisors, cybersecurity professionals, and those familiar with market advertising, like myself,” Maki said. “We wanted to make some extra money, but even if you invest cautiously, you won’t get back the money you invested.”
Maki also shared her feelings after the stock price crash. She noted that everyone had similar reactions: initial disbelief, followed by extreme emotional lows in the ensuing days. From what Maki learned, approximately half the victims lost around $10,000 in USD or EUR, while the other half lost $100,000, with a few losing even more.
Maki provided a series of links under the video, including a petition link calling for an investigation into the Ostin Technology “pump-and-dump” scam. At the time of reporting, the verified signatures stood at 569 out of the 1,000 signature goal.
The petition wrote: “A group disguised as financial advisors and market experts carefully planned this stock market fraud – they initially won my trust with a few successful trades, creating a facade of legitimacy and partnership. However, their true motives were quite sinister. After building enough trust, they pressured me to invest in an obscure company, promising substantial returns of 150% – 300% within 4 to 6 weeks, but it turned out to be a ‘pump-and-dump’ scam.”
Among the victims were seasoned professionals such as Tia Castagno, who runs a high-level executive training business in London.
Castagno commented below Powell’s post, seeking his help – the Ostin Technology investment scam wiped out all her savings. Castagno was lured into a WhatsApp group after clicking on a Facebook ad.
In his post, Powell also mentioned the inadequate oversight by the SEC, indicating that he had noticed the strange price movements of Ostin Technology in April – this wasn’t the first time Chinese concept stocks exhibited such behavior. He suspected that the operatives of Ostin Technology and TYD, the Jayud Global Logistics Limited (NASDAQ: JYD), were working together. On April 2, 2025, JYD’s stock price crashed, leading to retail investors being taken advantage of.