Charges brought against ASX pump and dump group
By Jamie Williamson
Four people have been criminally charged after an Australian Securities and Investments Commission (ASIC) investigation identified them as key members of a Telegram group named the 'ASX Pump and Dump Group.'
Syed Yusuf, Larissa Quinlan, Emma Summer, and Kurt Stuart have been charged with conspiracy to commit market rigging and false trading, to artificially inflate stock prices before selling them.
They were referred to the Commonwealth Director of Public Prosecutions by ASIC in December 2022.
ASIC alleges they formed a private group on messaging service Telegram to discuss and select penny stocks that they would then share in the public Telegram group known as 'ASX Pump and Dump Group.'
The names of stocks were shared to the group nine times over a three-week period in September 2021. In the same month, ASIC issued a public warning about social media posts encouraging 'pump and dump' activity.
"ASIC has recently observed blatant attempts to pump share prices, using posts on social media to announce a target stock, a designated time to buy and a target price or percentage gain to be reached before dumping the shares. In some cases, posts on social media forums may mislead subscribers by suggesting the activity is legal," it said at the time, adding that it had been working closely with market operators and licensees to disrupt such activity and identify those involved.
ASIC says each of the defendants in this case purchased some but not all the stocks they conspired to share with the public Telegram group, noting that they did so with the intention of pumping the price before selling.
They've also been charged with dealing in proceeds of crime as a result of selling the shares.
They face a maximum penalty of 15 years' imprisonment and a fine of more than $1 million.
"Market manipulation is illegal. Pump and dump schemes are a form of financial fraud, eroding investor wealth, threatening the integrity of our markets and potentially the Australian economy more broadly," says ASIC chair Joe Longo.
"Upholding the integrity of our Australia's financial markets is a priority for ASIC.
"ASIC monitors the cleanliness of our markets, and we take decisive action to disrupt activities that may impact cleanliness.
"This is why we took the action of entering social media forums and posting directly to issue warnings to members that their actions may be in breach of the law. Co-ordinated attempts to manipulate the market is a criminal offence."
This article first appeared on Financial Standard
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