FINANCE

A U.S.-Listed Chinese Microcap Sat at the Center of a $110 Million Pump-and-Dump Scheme

Published: Aug. 11, 2026 2:50 a.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

A global pump-and-dump scheme driven by AI-generated deepfakes of prominent market and business figures cost retail investors more than $110 million, according to U.S. prosecutors, in a fraud centered on Ostin Technology Group, a Cayman-registered, Nanjing-based display-screen maker listed on Nasdaq.

Victims across North America, Europe and the Middle East were drawn in through fabricated videos and ads impersonating figures including Elon Musk, Bill Ackman, Kevin O’Leary and market commentator Tom Lee. Users who clicked Facebook and Instagram ads were redirected to WhatsApp groups posing as private investment clubs, where “advisers” promised several short-term stock picks each month, with expected returns of 20% to 30% per trade.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and Bloomberg - for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

AI deepfakes of Elon Musk and others were used in a pump-and-dump scheme costing retail investors over $110 million.
The fraud centered on Ostin Technology Group, luring victims via social media ads to WhatsApp groups promising high returns.
Ostin's stock surged then collapsed 94%, leading to U.S. indictments and a shareholder class action.

AI generated, for reference only

Who’s Who

AI generated, for reference only

What Happened When

2019：: Ostin Technology Group (then Jiangsu Ostin Optoelectronics Technology Co. Ltd.) reported revenue of nearly 500 million yuan ($74 million), but net profit attributable to shareholders of only about 1 million yuan.

By the first half of 2020：: Ostin's liability-to-asset ratio had exceeded 80%.

2022：: After delisting from the New Third Board, Ostin reorganized under a Cayman entity and listed on Nasdaq.

January 2025：: Malaysian national Lai Kui Sen became Ostin’s co-chief executive, according to SEC filings.

By April 2025：: Before the alleged scheme accelerated, Ostin’s shares had fallen below $1, leaving it with a market capitalization of about $22 million.

May 2025：: The WhatsApp groups began directing members to buy Ostin shares, claiming a takeover was imminent.

On May 3, 2025：: The warrants were surrendered and canceled in exchange for 70.9 million additional Class A shares, without the investors paying extra cash.

From June 9 to June 25, 2025：: Ostin’s average daily trading volume increased from fewer than 1,000 shares in February and March 2025 to more than 500,000 shares.

On June 26, 2025：: After reaching an intraday high of $9.40, the stock collapsed to close at $0.55, down more than 94%.

September 2025：: The U.S. Justice Department indicted Lai and external financial adviser Yan Zhao on conspiracy, securities-fraud and wire-fraud charges.