“Where they were designated groups that were targeting stocks every couple of weeks, we really took that approach [of warning traders] by participating in those social media chat rooms.”
ASIC stunned the social media trading sphere last year when it managed to join these groups and post a harsh warning to members, which read: “Co-ordinated pumping of shares for profits can be illegal. We can see all trades and have access to trader identities. We’re monitoring this platform, and we may be investigating you. You can run the risk of a criminal record, including fines of more than $1M and prison time by being involved.”
The ASIC warning was removed soon after being posted. Credit:
ASIC’s interventions were initially treated sceptically by participants in the groups.
“This has clearly been sent by someone from another telegram group trying to spook people here. ASIC don’t send messages like this,” said one participant of a Telegram group minutes after ASIC made its post.
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But ASIC confirmed to the media that it was responsible for sending the message.
Aldridge says ASIC’s warnings seem to have had an impact on the traders.
“Maybe the interventions that we made had some impact and we managed to get through to those people who are in that chat room.”
“I think also for all of this year the market has just been in a different stage. The focus is quite different,” Aldridge says, pointing to the fewer opportunities for stocks to spike in a much less frothy market.
ASIC told a Senate committee last year that completely stamping out this type of activity entirely would be difficult.
“Given the highly fragmented nature of social media platforms and the extensive use of encrypted and private chat channels, it is challenging for ASIC to systematically monitor all activity which may be associated with potential market misconduct,” ASIC said at the time.
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