First finfluencer sentenced for market manipulation
Gabriel Govinda has been sentenced to two and half years imprisonment after pleading guilty to charges of share manipulation and illegal dissemination of information.
Govinda, known online as Fibonarchery, was sentenced at Melbourne County Court on 3 May to two and a half years imprisonment to be released immediately on a five-year recognisance in the amount of $5,000 and fined $42,840.
This followed Govinda pleading guilty to 23 charges of manipulation of shares listed on the Australian Securities Exchange and 19 charges of illegal dissemination of information relating to the manipulation.
Between September 2014 to July 2015, Govinda used 13 different share trading accounts, held in the names of friends and relatives, to manipulate the share price of 20 different listed stocks.
He also illegally disseminated information about his wash trades and dummy bids on HotCopper. He was seeking to increase (or pump) the share price, then selling (or dumping) the listed stocks at a higher price. This is often referred to as ‘pump and dump’.
ASIC noted a search of his premises in 2015 had uncovered a notebook which stated: “‘Buy big parcels of small cap cash backed resource shares at reasonable price, alert H.C Daytraders to the action sell to them at higher price at end of day.’ It also read ‘sell to self to create illusion of volume’ and ‘sell stock down to yourself then buy stock up to yourself. Buy cheap, make it expensive again, sell to others.”
For actions like this that took place after March 2019, the penalty for this crime had been increased to 15 years imprisonment.
ASIC deputy chair, Sarah Court, said: “Govinda used a social media forum as an integral part of his market manipulation. He promoted certain shares that he had an undisclosed interest in, and which he had manipulated, with a view to selling out at a higher price.
“‘Individuals who look to social media, whether that be online forums or via platforms such as Instagram and Facebook, to promote stocks or financial products, should take notice of today’s court decision. Finfluencer conduct, whether by using social media to manipulate the market, using a platform to profit from promoting manipulation done by others, or to promote financial products you are not licensed to promote, can result in serious consequences.”
The Commonwealth Director of Public Prosecutions prosecuted the matter after a referral from ASIC.
AUTHOR
Laura Dew
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
