AI Quantitative Stock-Picking Financial Scam: Ponzi Schemes Wrapped in Fake Trading Software

Who Gets Targeted

Primarily retail investors with some savings but lacking financial literacy and stock market experience, as well as middle-aged and elderly groups pursuing high returns. Anxious and impatient amid stock market fluctuations, they are eager to find a shortcut to guaranteed profits, blindly following high-tech buzzwords like AI and quantitative trading. Easily swayed by insider information and the get-rich-quick atmosphere fostered by livestream lecturers, they fall into the sunk cost fallacy and continuously add investments, realizing they have been scammed only when the platform restricts withdrawals. Their psychological vulnerabilities stem from greed and blind obedience to authority under cognitive asymmetry.

骗局怎么运作

• Step 1: Publish ads for AI stock-trading secrets via short-video platforms and livestreams, attracting eyeballs with exaggerated return screenshots and lecturer personas. After traffic acquisition, so-called financial mentors create a sense of urgency in group chats using pitches such as 'AI quantitative models capturing insider trading data with stable monthly returns exceeding 150%,' inducing victims to leave legitimate brokerages and download apps from unofficial, unknown app stores specified by them.
• Step 2: The app downloaded by victims is actually fake trading software independently developed by the syndicate. The interface is highly simulated, displaying fabricated real-time market data and fake transaction records. After victims deposit funds, their money does not enter the real securities market, but is instead directly transferred to third-party payment platforms or private bank accounts controlled by the syndicate. This closed-loop operation completely bypasses the third-party fund custody regulatory mechanism.
• Step 3: In the initial stage, backend data is manipulated to make victims' accounts show continuous high profits, and even small-scale withdrawals are permitted to build trust. Subsequently, under the guise of VIP upgrades and reaching certain trading volume thresholds, the sunk cost effect is exploited to induce victims to invest larger sums, initiating a months-long fattening phase to create a group illusion of sudden wealth through social media earnings sharing.
• Step 4: When the capital pool reaches a certain scale or victims demand large-scale withdrawals, the syndicate delays payouts or even freezes accounts under pretexts such as system upgrade maintenance, regulatory violations requiring margin payments, individual income tax, and unfreezing fees. Ultimately, the syndicate directly zeros out the virtual digital positions in the victims' accounts through the backend or shuts down the entire fake trading platform server directly.
• Step 5: Before the platform collapses and flees, it often repeatedly reboots by rebranding and changing names, or even adopts a three-tier commission-rebate multi-level marketing model to recruit new participants and sustain the pool, transferring collapse risks to newcomers. Before cutting off all contact with victims, the operating syndicate destroys core server data, completing capital transfer and money laundering.

红旗信号（看到这些快跑）

• 🚩 Requiring the download of stock-trading software not listed on official app stores, or downloaded via unknown links and QR codes.
• 🚩 Claiming daily returns of 3% or monthly returns exceeding 150%, far surpassing normal market return rates, while promising principal protection, guaranteed returns, or stable profits.
• 🚩 Deposit accounts are not official corporate accounts of securities companies, but rather require transfers to commercial company accounts, personal accounts, or third-party payment platforms.
• 🚩 The platform frequently refuses or delays withdrawals under the pretext of system maintenance, regulatory violations, or unexpired lock-up periods, or demands margin and tax payments before withdrawals can be made.
• 🚩 Livestream lecturers and sales representatives lack securities practice qualifications and hold no legitimate financial licenses, yet wildly recommend individual stocks and financial products, using chat group shills to create an atmosphere of overnight wealth.

真实案例

• In June 2026, the Shenzhen Securities Regulatory Bureau pointed out that certain institutions conducted illegal stock-recommendation activities under the guise of AI quantitative stock selection and AI stock trading, claiming self-developed quantitative trading software to mislead investors into purchasing high-priced stock-recommendation services or popular copy trading, involving huge sums and leaving investors penniless.
• According to reports from online financial investigation websites, the Huijing Quantitative platform claimed to use top-tier AI models to achieve a 3% daily return, inducing investors to inject capital. In reality, funds never entered the stock market, and the displayed profit data were all manually modified and forged in the backend. The platform comprehensively locked positions to harvest member funds, ultimately leaving a large number of victims unable to withdraw.
• In August 2026, Shenzhen Public Security officially initiated a criminal investigation into the comprehensive position-locking incident of the Zhongshengming Quantitative AI Financial Scheme. This platform attracted copy trading under the name of AI quantitative wealth management, with estimated involved amounts exceeding 300 million yuan. Before the capital chain ruptured, the operating syndicate prohibited all members from withdrawing funds and destroyed most operating records.
• According to a report by 21 Century Business Herald in February 2026, an investor poured 1.6 million yuan into so-called AI quantitative stock-trading wealth management, believing promises of monthly returns exceeding 150% and fake profit screenshots. Ultimately, the platform operators completely lost contact, principal was lost, and police intervention confirmed the funds were squandered by the syndicate and used to pay early rebates.
• In May 2025, the Economic Crime Investigation Corps of the Shanghai Municipal Public Security Bureau disclosed that police smashed three illegal stock-recommendation criminal syndicates involving over 92 million yuan. These syndicates registered multiple technology companies, privately developed multiple strategy stock-picking apps and algorithms, and funneled and developed clients by publishing online ads with gimmicks such as '3.5 times returns in a year' (Source: [https://www.jfdaily.com/wx/detail.do?id=918807](https://www.jfdaily.com/wx/detail.do?id=918807)).
• In February 2026, an investigative report by Jiemian News revealed that the 'Taibai Investment' fake app financial scheme misappropriated the name of Temasek's Taibai Investment, using AI to generate customized stock-recommendation pitches and virtual trading apps to display fake fund flows. Launched in May 2025 and wrapping up/fleeing in December, the number of reporters in Nanjing alone reached about 30, with involved amounts reaching 30 million yuan (Source: [https://www.jiemian.com/article/13988563.html](https://www.jiemian.com/article/13988563.html)).

Official Stance

• On June 12, 2026, the Shenzhen Securities Regulatory Bureau issued a risk warning regarding three types of illegal stock recommendation schemes including AI quantitative stock selection, reminding investors to be alert to fake stock-trading software and AI stock scams, and never to believe high returns dropping from the sky.
• In August 2026, the official WeChat account of the Economic Crime Investigation Bureau of the Ministry of Public Security reposted an article titled 'Targeting Securities and Futures Crimes | Traps Behind Livestream Stock Recommendations,' pointing out that illegal stock-recommendation livestream rooms are utilizing AI concepts to package scams and guide investors to deposit funds through irregular channels.
• On April 30, 2026, peer institutions such as China Southern Asset Management (Zhuque Fund) reposted risk warnings, cautioning against false stock-trading software in the capital market and illegal financial activities carried out under the name of AI stock trading, reminding investors to be sure to recognize legitimate licensed financial institutions.
• In 2026, Securities Times published an article warning against illegal financial activities carried out under the names of fake stock-trading software and AI stock trading, calling on investors to maintain high vigilance against ultra-high return promises and unapproved third-party platforms.

How to Protect Yourself

• ✅ Before investing, be sure to verify through the official websites of the China Securities Regulatory Commission (CSRC) and the Securities Association of China whether the involved institutions and personnel possess relevant business qualifications and securities investment consulting practice qualifications, and resolutely reject any so-called internal stock-recommendation services from unqualified parties.
• ✅ Recognize official applications of legitimate securities operating institutions approved by the CSRC, and resolutely refuse to click unfamiliar links or scan QR codes sent via private WeChat or livestream rooms to download stock trading and wealth management software.
• ✅ Strictly verify the payee account name before depositing funds. Fund accounts of regular brokerages are designated third-party custodian bank accounts. Any demand to transfer funds to personal accounts, non-corporate accounts, or unrelated commercial company accounts must be rejected without exception.
• ✅ Maintain immunity against any publicity regarding AI quantitative trading, smart copy trading, etc., that promises high returns, principal protection, or ultra-high win rates. Remember that investment involves risks, and free pies do not drop from the sky. Guard against mentor brainwashing and fake screenshot inducements.