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Beware the ‘pump and dump’ & Market Manipulation

Friday 24 September 2021
stylus and screen with the markets--Companies need to comply with market integrity rules and avoid pump and dump campaigns

This week the Australian Securities and Investments commission (ASIC) expressed concern with the rise of ‘pump and dump schemes that seem to be on the rise.

For 2021 the regular has taken or is in the process of taking enforcement action this space. 

Dylan Rands has been banned from the financial services for 5 years for market manipulation.  Avrohom Kimelman plead guilty for conspiracy to manipulate the market, Zhoughan Wu was sentenced to prison a year and 10 months for market manipulation, Gabriel Govinda faced 23 charges of market manipulation and 19 charges disseminating information related to market manipulation.

Those are just four out of six examples of enforcement action taken by the securities and Investment regulator have taken in the context market manipulation in 2021 so far.
‘Pump and Dump’ campaigns in the regulatory crosshairs
However, ‘pump and dump schemes are a particular cause for concern. 

Earlier this month ASIC warned invest about believing hype about particular shares.

 “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.”  The regular said in an official statement this the week.

ASIC Commissioner Cathie Armour said in official statement, “ASIC has been working closely with market operators to identify and disrupt pump and dump campaigns, and we will continue to target actions that threaten the integrity of markets and to take enforcement action where appropriate."