Recognizing pump and dump schemes is crucial for protecting investors from financial loss. These schemes manipulate market sentiment, often using social media, email campaigns, or online forums to create a sense of urgency and FOMO (Fear of Missing Out). Understanding the signs of manipulation helps traders avoid falling victim to artificially inflated markets. Regulatory agencies continuously monitor and take legal action against pump and dump activities to maintain market integrity. Awareness of such schemes promotes responsible investing and enhances market transparency.