ASIC makes first ‘pump and dump’ social media conviction

The Australian Securities and Investments Commission (ASIC) has charged Gabriel Govinda with market manipulation after running a ‘pump and dump’ scheme.

Govinda pled guilty on 6 June, 2022 to 23 charges of manipulation of listed stocks on the Australian Securities Exchange (ASX) and 19 charges of illegal dissemination of information relating to manipulation.

His guilty plea to charges under s1041D of the Corporations Act related to online posts on trading forum HotCopper, using the name Fibonarchery, where he sought to pump up the share price then dump them at a higher price. ASIC said this was the first time a person had been convicted of this breach.

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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.

This was done by:

  • Trading between the accounts he controlled (wash trading);
  • Using fake, ‘prop’, or ‘dummy’ bids to falsely increase the perceived demand, and ultimate price, for listed stocks.

He faced a maximum penalty for each charge of 10 years’ imprisonment or a fine of up to $765,000 or both.

ASIC had previously warned about these campaigns in a crackdown on finfluencers and recommended participants warned them if it saw suspicious activity or misconduct.

This matter was adjourned part-heard to 29 July, 2022 for a mention hearing.

The Commonwealth Director of Public Prosecutions prosecuted the matter after a referral from ASIC.

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So he did what a bank’s algo trading does every milli second.

ASIC should also focus on Lifestyle Directors within the small cap space of the ASX. Their only goal is how much they can siphon off investors with exorbitant director fees, capital raising fees, related party loans and other transactions.

Should have promoted crypto instead and he would have been fine

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