Social networks under the surveillance of ASIC

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Investors using social media and chat rooms to perform market manipulation are already under increased scrutiny by the Australian Securities and Investments Commission (ASIC).

ASIC last month warned that it had noted a “trend in social media posts being used to coordinate the ‘pumping and dumping’ activity of listed stocks” and that such market manipulation was being illegal.

It has now been noted that ASIC is actively monitoring and even participating in these discussions.

Dale Gillham, chief analyst at Wealth Within, highlighted a specific Telegram chat room that was used to “pump and dump” shares in listed company YPB.

Shares of this ASX-listed stock rose significantly and then traded erratically in the week starting October 8.

“What this organization was not aware of or chose to ignore is that ASIC has been monitoring the development of this stock for a few months. So much so that ASIC posted on the Telegram discussion forum that their involvement in pumping and dumping inventory may be an illegal activity that could lead to fines of over $ 1 million or even jail time, ” Gillham said.

“What a lot of people involved in these discussion forums, and indeed most investors don’t understand, is that ASIC has sophisticated systems to monitor all transactions, including suspicious transactions.

“ASIC also knows who is behind every stock bought and sold on the stock exchange and they have recently made it very clear that they are targeting these discussion boards, as well as social media influencers who talk about financial products, including stocks. .

ASIC Commissioner Cathie Armor said: “ASIC has worked closely with market operators to identify and disrupt pump and dump campaigns, and we will continue to target actions that threaten the market integrity and to take enforcement action where necessary.

“We expect everyone involved in these campaigns to recognize the potential impact on market integrity and to know that ASIC is monitoring all transactions in the ASX stock market in real time.”

She urged participants to be informed and to inform the regulator if they observed groups of people trading the same security at the same time, opening accounts at the same time, or transferring funds between them.


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