Social media under ASIC’s watch

18 October 2021
| By Laura Dew |
image
image
expand image

Investors using social media and chatrooms to conduct market manipulation are already coming under increased scrutiny from the Australian Securities and Investments Commission (ASIC).

Last month, ASIC warned it had noted a “concerning trend social media posts being used to coordinate ‘pump and dump’ activity in listed stocks” and that such market manipulation was illegal.

It has now been noted that ASIC was actively watching and even participating in these chats.

Dale Gillham, chief analyst at Wealth Within, highlighted a specific Telegram chatroom which was being used to ‘pump and dump’ shares in listed company YPB.

Shares in this ASX-listed stock spiked dramatically and had subsequently traded erratically during the week commencing 8 October.

“What this organisation was not aware of or chose to ignore is that ASIC had been watching the share price movement of this stock for a few months. So much so, that ASIC posted on the Telegram chat forum that their participation in pumping and dumping stocks may be illegal activity that could result in fines of more than $1 million or even jail time,” Gillham said.

“What many involved in these chat forums, and indeed most investors don’t understand is that ASIC has sophisticated systems to monitor all trading including any suspicious trading.

“ASIC also knows who is behind every share bought and sold on the stock market and they have recently made it very clear that they are targeting these chat forums, as well social media finfluencers who talk about financial products including stocks.”

ASIC commissioner, Cathie Armour, said: “ASIC has been working closely with market operators to identify and disrupt pump and dump campaigns, and we will continue to target actions that threaten the integrity of markets and to take enforcement action where appropriate.

“We expect anyone involved in these campaigns to recognise the potential impact on market integrity and to be aware ASIC monitors all trading on the ASX equity market on a real time basis.”

She urged participants to be aware and notify the regulator if they observed groups of people trading in the same stock at the same time, opening accounts at the same time or transferring funds between themselves.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago