{"schema_version":"0.10.0","id":"LR-2026-0427","record_version":1,"title":"Shareholders accuse Ostin Technology of deepfake-driven pump-and-dump scheme","verification":{"human_verified":false,"method":"automated_gate","auto_verified":true,"score":43.5,"score_breakdown":{"source_authority":12.1,"independent_corroboration":7.0,"implicated_party_confirmed":0.0,"citation_integrity":14.0,"specificity":0.0,"completeness":3.84,"unhedged_language":4.41},"checks":{"schema_valid":true,"every_field_cited":true,"quotes_verbatim":true,"source_fetched":true,"distinct_incident":true,"dates_plausible":true,"sources_agree":true,"source_describes_incident":true,"severe_backed_by_source":true,"record_integrity":true,"eligible":true,"about_this_case":true},"gate_version":"gate-2026-10-18.7","cross_check_model":null,"cross_check_agreement":null,"duplicate_of":null,"verified_by":null,"verified_at":"2026-11-01","extraction_run_id":null,"evidence_level":{"level":"preliminary","reason":"Publisher not yet named · subject to change","original_document":null,"reports_total":1,"reports_independent":0,"reports_derivative":0,"developing":false,"disputed":false,"rules_version":"evidence-2026-10-29.1","computed_at":"2026-11-01","history":[{"date":"2026-11-01","from_level":null,"to_level":"preliminary","reason":"Publisher not yet named · subject to change"}]},"sources_hash":"4ce133be10e023bf56a9c8fa415ad1f8f7c15c954f4222170e335c03087ea8c2"},"system":{"model_name":null,"model_version":null,"developer":"unknown","harness":null,"tools_granted":[],"permissions_scope":null,"autonomy_level":"unknown","guardrails_present":[],"deployment_context":"unknown","tier":null,"lifecycle_stage":null,"integration_type":null,"intended_use":null,"safeguard_state":null,"production_intended":null},"event":{"date_occurred":null,"date_disclosed":"2026-02-17","incident_class":"other","failure_class":null,"agent_involved":null,"secondary_failure_classes":[],"trigger":"human_misuse","duration":null,"detection_method":"unknown","summary":"According to a lawsuit filed in the Southern District of New York, AI-generated deepfake videos, stolen advisor credentials and fake promotion were allegedly used in a pump-and-dump scheme around Ostin Technology Group's NASDAQ-listed shares. The plaintiffs allege that fake social media profiles borrowed the names and credentials of real advisors, and that promoters in WhatsApp groups issued daily buying instructions. The share price rose from $0.78 to $9.40 between mid-April and late June 2025, then fell to $0.55 in a single session on June 26, 2025, and stop-loss orders reportedly failed to trigger. The Department of Justice later unsealed a criminal indictment against two individuals, and NASDAQ halted trading in the shares. No determination on the merits has been made, and the case remains at an early stage.","tags":[],"date_detected":null,"near_miss":null,"root_cause":null,"root_cause_detail":null,"failure_class_detail":null,"responsible_party":null,"adversarial_actor":"insider","input_provenance":null,"time_to_contain":null,"operations_paused":null,"remediation":null,"precursor_events":null,"primary_risk":"RK19","secondary_risks":["RK03"]},"impact":{"direct_loss_usd":null,"remediation_hours":null,"records_exposed":null,"third_parties_affected_count":null,"severity":"major","severity_because":"Test: a regulator involved (FBI, SEC Office of Inspector General, FINRA referral) and two or more affected parties stated (more than 235 alleged victims).","harm_class":["financial"],"affected_description":"More than 235 alleged victims, per the plaintiffs","protected_class_involved":null,"data_categories_exposed":[],"loss_range_usd":null,"reversibility":null,"downstream_exposure_count":null},"evidence":{"sources":[{"url":"https://www.investmentnews.com/regulation-legal-compliance/legal-shareholders-accuse-ostin-technology-of-deepfake-driven-950m-pump-and-dump-scheme/265308","publisher":"InvestmentNews","date":"2026-02-17","type":"press","title":"Legal: Shareholders accuse Ostin Technology of deepfake-driven $950M pump-and-dump scheme - InvestmentNews","archived_url":null,"attachment":"first_report"}],"per_field_confidence":{"event.trigger":"C","event.adversarial_actor":"C","impact.affected_description":"C","impact.harm_class":"C","event.incident_class":"D","impact.severity":"D","impact.severity_because":"D","event.primary_risk":"D","event.secondary_risks":"D","event.summary":"C","system.autonomy_level":"D","system.deployment_context":"D","event.detection_method":"D","context.country":"D","system.developer":"D","event.date_disclosed":"D","context.denominator_available":"D"},"field_citations":{"event.trigger":[{"source_index":0,"quote":"At the center of the allegations are co-CEO Lai Kui Sen and financial advisor Yan Zhao, who the plaintiffs say began laying the groundwork for the scheme in late 2024."}],"event.adversarial_actor":[{"source_index":0,"quote":"At the center of the allegations are co-CEO Lai Kui Sen and financial advisor Yan Zhao, who the plaintiffs say began laying the groundwork for the scheme in late 2024."}],"impact.affected_description":[{"source_index":0,"quote":"The plaintiffs — from Israel, Canada, the United States, Germany, the Netherlands, and Switzerland — say they have been in contact with more than 235 victims, with individual losses ranging from around $10,000 to over $820,000."}],"impact.harm_class":[{"source_index":0,"quote":"Investors allege a stock wipeout exceeding $950 million, driven by deepfake videos, stolen advisor credentials, and fraudulent SEC filings in a NASDAQ-listed company."}],"event.incident_class":[{"source_index":0,"quote":"Investors allege a stock wipeout exceeding $950 million, driven by deepfake videos, stolen advisor credentials, and fraudulent SEC filings in a NASDAQ-listed company."}],"impact.severity":[{"source_index":0,"quote":"The investigation — led by the FBI and the SEC Office of Inspector General, with a referral from FINRA's Market Abuse Group — resulted in NASDAQ halting trading of OST shares indefinitely."}],"impact.severity_because":[{"source_index":0,"quote":"The investigation — led by the FBI and the SEC Office of Inspector General, with a referral from FINRA's Market Abuse Group — resulted in NASDAQ halting trading of OST shares indefinitely."}],"event.summary":[{"source_index":0,"quote":"The operation allegedly went further, deploying AI-generated deepfake videos of prominent figures including Goldman Sachs Chief Strategist David Kostin, Elon Musk, and Mark Zuckerberg through sponsored Instagram and Facebook ads."},{"source_index":0,"quote":"According to the lawsuit, a coordinated promotional blitz launched around May 11, 2025, used fake social media profiles built with names, photos, and credentials lifted from real SEC- and FINRA-registered advisors."},{"source_index":0,"quote":"Inside the WhatsApp groups, promoters posing as fellow investors allegedly issued daily buying instructions, touted their own supposed purchases, and promised weekly returns of 15-25%."},{"source_index":0,"quote":"OST's stock ran from $0.78 to $9.40 between mid-April and late June 2025 — all while the company reported declining revenues of $38 million, losses of $10.6 million, and virtually zero institutional ownership."},{"source_index":0,"quote":"OST's stock plummeted from $9.40 to $0.55 in a single session, with trading volume spiking to more than five times the daily average."},{"source_index":0,"quote":"Stop-loss orders failed to trigger as the stock gapped through price levels too fast for execution."},{"source_index":0,"quote":"By September 2025, the Department of Justice had unsealed a criminal indictment charging Lai Kui Sen and Yan Zhao with securities fraud, wire fraud, and conspiracy."},{"source_index":0,"quote":"The investigation — led by the FBI and the SEC Office of Inspector General, with a referral from FINRA's Market Abuse Group — resulted in NASDAQ halting trading of OST shares indefinitely."},{"source_index":0,"quote":"No determination on the merits has been made."},{"source_index":0,"quote":"The case remains at an early stage."}]},"notes_on_gaps":"Source 0 is a single press report of a lawsuit; all conduct is alleged, not adjudicated, and the article says no determination on the merits has been made. No AI agent, model, developer, harness or tool is named; the deepfakes were generated by an unnamed tool, so system fields and event.agent_involved, failure_class and related fields are left out. incident_class 'other' and trigger 'human_misuse' are my judgement from the alleged human-run scheme. The lawsuit filing date 2026-02-16 takes its year from the article date header (2026-02-17), not from the sentence itself. date_occurred is not set because the alleged scheme spans late 2024 to June 2025. The $950 million figure is a market-capitalisation wipeout claimed by investors, not a stated direct loss, so direct_loss_usd is left out; individual victim losses are not summed. The count 235 is a floor ('more than 235'). No controls from this incident are stated as held, failed or missing; the stop-loss failure is not mapped to a listed control. No remediations are reported. Country and industry are not stated as a single incident location, so they are left out. Severity 'major' rests on a regulator being involved and more than two affected parties being stated. [case created by the backfill: read by claude-haiku-5-5, backfill-2026-11-01.2, 2026-11-01; not yet reviewed] [2026-11-01: evidence level set: Preliminary (Publisher not yet named · subject to change)]"},"context":{"industry":null,"org_size_band":null,"country":"unknown","denominator_available":false,"denominator":null,"related_incident_ids":[],"systemic_exposure":null,"shared_model_id":null,"upstream_incident_id":null,"incident_evidence":null,"regulatory":null,"coverage":null},"narrative":{"steps":[{"step":"reached","text":"The plaintiffs say they are in contact with more than 235 alleged victims, with individual losses ranging from around $10,000 to over $820,000.","quote":"The plaintiffs — from Israel, Canada, the United States, Germany, the Netherlands, and Switzerland — say they have been in contact with more than 235 victims, with individual losses ranging from around $10,000 to over $820,000.","source_index":0,"grade":"C"},{"step":"caught","text":"An investigation led by the FBI and the SEC Office of Inspector General, with a FINRA referral, led NASDAQ to halt trading of OST shares indefinitely.","quote":"The investigation — led by the FBI and the SEC Office of Inspector General, with a referral from FINRA's Market Abuse Group — resulted in NASDAQ halting trading of OST shares indefinitely.","source_index":0,"grade":"C"}],"model":"claude-haiku-5-5","prompt_version":"backfill-2026-11-01.2","extracted_at":"2026-11-01","source_urls":["https://www.investmentnews.com/regulation-legal-compliance/legal-shareholders-accuse-ostin-technology-of-deepfake-driven-950m-pump-and-dump-scheme/265308"]},"analysis":{"sections":{"timeline":[{"text":"Plaintiffs say the alleged scheme's groundwork began.","quote":"who the plaintiffs say began laying the groundwork for the scheme in late 2024","source_index":0,"when":"late 2024"},{"text":"Alleged coordinated promotional blitz launched using fake social media profiles.","quote":"According to the lawsuit, a coordinated promotional blitz launched around May 11, 2025, used fake social media profiles built with names, photos, and credentials lifted from real SEC- and FINRA-registered advisors.","source_index":0,"when":"around May 11, 2025"},{"text":"OST share price rose from $0.78 to $9.40 during this period.","quote":"OST's stock ran from $0.78 to $9.40 between mid-April and late June 2025","source_index":0,"when":"mid-April to late June 2025"},{"text":"Stop-loss orders reportedly failed to trigger during the single-session drop.","quote":"Stop-loss orders failed to trigger as the stock gapped through price levels too fast for execution.","source_index":0,"when":null},{"text":"Retail investors were allegedly told to hold until this date.","quote":"Many retail investors had been told to hold until July 4.","source_index":0,"when":"July 4"},{"text":"Department of Justice unsealed a criminal indictment.","quote":"By September 2025, the Department of Justice had unsealed a criminal indictment charging Lai Kui Sen and Yan Zhao with securities fraud, wire fraud, and conspiracy.","source_index":0,"when":"September 2025"},{"text":"NASDAQ halted trading of OST shares indefinitely.","quote":"The investigation — led by the FBI and the SEC Office of Inspector General, with a referral from FINRA's Market Abuse Group — resulted in NASDAQ halting trading of OST shares indefinitely.","source_index":0,"when":null},{"text":"Shareholders filed the lawsuit in the Southern District of New York.","quote":"The case, filed February 16 in the Southern District of New York, paints a picture of a scheme that allegedly turned a struggling Chinese display manufacturer into a billion-dollar fraud vehicle, inflating OST's share price by 1,175% over roughly two months before a single-day crash erased more than 94% of the company's market capitalization.","source_index":0,"when":"February 16"}]},"model":"claude-haiku-5-5","prompt_version":"backfill-2026-11-01.2","extracted_at":"2026-11-01","source_urls":["https://www.investmentnews.com/regulation-legal-compliance/legal-shareholders-accuse-ostin-technology-of-deepfake-driven-950m-pump-and-dump-scheme/265308"]}}