ASIC cracks down on market gossip
ASIC has announced that people who spread market gossip and false rumours will be targeted for prosecution and may face up to five years in jail.
ASIC is concerned that gossip and false rumours are being used to artificially provoke sales and to reduce the market price of some shares.
The announcement comes after a month of extreme stock market volatility in which several high-profile company collapses have occurred.
“ASIC has been approached by a number of market participants concerned that some individuals are deliberately spreading false rumours or misleading information about listed securities,” a press release stated.
“Conduct of this type can be a criminal offence and ASIC … will be vigilant in monitoring the market to ensure this type of behaviour is detected and prosecuted.”
Individuals who spread rumours without checking if they are true or false may also face prosecution.
The maximum penalty for an individual who is found guilty is five years imprisonment and a fine of $220,000.
Last week the Sydney Morning Herald reported that the chief executive of ABC learning Centres, Eddy Groves, had blamed the fate of his troubled stocks on unsubstantiated rumours that the company had breached a loan covenant.
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