Not upheld: Investment scam protection - pump and dump scheme complaint against Hargreaves Lansdown Asset Management Limited

Decision detail

Summary

Mr R, a long-standing HL customer, purchased shares in company O through multiple accounts in May and June 2025 based on a WhatsApp stock tip. The shares collapsed in June 2025, and Mr R realised he was victim of a pump and dump scam. He complained that HL should have flagged unusual trading activity, warned about the specific stock, and provided email scam warnings. The ombudsman found that HL's execution only service meant Mr R was responsible for his own decisions, their monthly transaction monitoring was not designed to detect scams, and they took reasonable steps to warn customers through multiple channels. The ombudsman did not uphold the complaint as there is no regulatory requirement for platforms to reimburse customers for investment scam losses.

The Ombudsman's reasoning

The ombudsman found that HL provided an execution only service where Mr R was responsible for his own trading decisions. HL's monthly transaction monitoring process was not designed to detect investment fraud or scams, and they did alert Mr R to unusual trading behaviour on 2 July 2025, albeit after the price collapse. HL took reasonable steps to warn customers about investment scams through multiple channels (website, mobile app, social media). Market manipulation is difficult to identify in real time, and the absence of regulatory warnings or trading suspensions for company O made it difficult for HL to identify potential manipulation. There is no regulatory requirement for investment platforms to reimburse customers for losses due to investment scams or market manipulation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website