In September this year, the Australian Securities and Investment Commission (ASIC) sounded the alarm on ‘pump and dump’ schemes gaining popularity on social media platforms.
Pump-and-dump activity occurs when a person buys shares in a company and starts an organised program to seek to increase (or ‘pump’) the share price.
They do this by using social media and online forums to create a sense of excitement in a stock or spread false news about the company’s prospects.
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They then sell (or ‘dump’) their shares and take a profit, and other shareholders suffer as the share price falls.
ASIC said at the time that the practice “may amount to market manipulation” and could be in breach of the Corporations Act.
And now, the regulator has named the 14 stocks that it identified as being the victims of pump-and-dump schemes:
Marquee Resources (MQR)
TTA Holdings (TTA)
Albion Resources (ALB)
Aruma Resources (AAJ)
Australasian Metals (A8G)
Ozz Resources (OZZ)
Tempest Minerals (TEM)
Locksley Resources (LKY)
Culpeo Minerals (CPO)
Jayex Technology (JTL)
Western Gold Resources (WGR)
Aura Energy (AEE)
ASIC warned that if an investor decided to buy shares as part of one of these campaigns, they may have become the victim.
Market manipulation is illegal and it can attract a fine of more than $1 million and up to 15 years’ imprisonment.
“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,” ASIC Commissioner Cathie Armour said.
“We expect anyone involved in these campaigns to recognise the potential impact on market integrity and to be aware ASIC monitors all trading on the ASX equity market on a real-time basis.”