The bad news is that there are stock market manipulators who conspire to drive up share prices and then sell them to make a quick profit. It’s called pumping and dumping. But the good news is that the corporate cop — the Australian Securities and Investments Commission (ASIC) — has these shysters in court.
Historically, ASIC has been accused of not being effective in pursuing market-connected crimes but the regulator’s chairman, Joe Longo, wants to make it clear that this cop on the beat means business.

For a long time, it has been argued by some quarters that ASIC hasn’t got enough scalps when it comes to crimes orchestrated in financial markets and services. However, Mr Longo wants to change that impression.
“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,” the AFR reported that he said in a statement.
As a consequence, Syed Yusuf, Larissa Quinlan, Emma Summer and Kurt Stuart were before the court this week following pump and dump conspiracies, they allegedly were connected to during the pandemic lockdown era.

Over a three-week period, nine small-cap companies (mainly resource stocks) saw their share prices pumped up and then, after a significant rise, the stock was dumped. All up, the group is accused of making $85,000 over three weeks of pumping and dumping.
How did the organisers get a couple of thousand market players to join in the scam? The answer is by using Telegram channels that Wikipedia tells us are “…one-way feeds where the channel owner or admins can post content while followers can only read, react and comment, if comments have been enabled. Channels can be created for broadcasting messages to an unlimited number of subscribers.”

Ah yes, just another criminal opportunity brought to us by the Internet and the failure of politicians to care that there are pirates out there on the ‘open seas’ raiding people’s wealth that no one seems to care about. So, Joe Longo and ASIC are at least doing something, however it needs help and that’s where politicians and the Government need to step up.
The AFR’s team of writers made it clear that the regulator needs help from Canberra with the following: “ASIC will also use the case to illustrate the delay caused by the chronic under-resourcing of the Commonwealth Director of Public Prosecutions, which was handed ASIC’s brief of evidence in December 2022.”

As an example of what the group in court were accused of, take the case of Australasian Gold Limited, whose shares opened up 9.8% at 28 cents, before rising to 30 cents before the pumping was rammed up via mentions on a Telegram channel, which saw the stock quickly hit 47 cents.

Comments on the Telegram site indicate that some of the many participants who helped the pumping thought it was legal to do it! However, they were clearly uninformed patsies who might have made money by getting out ahead of the dumping, but it shows ASIC needs more money/resources to perform its job and clearly better education for market participants looks overdue!
In an age where young people can’t buy property, many are using the stock market to try and build wealth. But it means they could easily be victims of ‘wise guys’ and ‘fast buck’ merchants. Personally, I worry about some of the cryptocurrency ads that are obviously targeted at the young, who want to make money in something “cool” like crypto.

This is an area where the regulator should be looking at the marketing of these products. In the world of gambling, the media now has to remind punters that “you are about to lose…”, which is the kind of warning that should be imposed on some of the investment products now being marketed.

What happens to these pumpers and dumpers should be interesting. Rene Rivkin, the famous entrepreneur, investor, investment adviser and stockbroker was convicted of insider trading in 2003 and sentenced to nine months of periodic detention.

He was caught trading shares in Qantas after the chairman of Impulse, Gerry McGowan, told him of a pending merger with the flying kangaroo! He profited $2,664.94 and did nine months in jail!
Those before the court on these pumping and dumping charges could be fined a million dollars and could cop 15 years jail!