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.
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.
AUTHOR
Laura Dew
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
