ASIC monitors platforms in order to disrupt illegal market manipulation

The Australian Securities and Investments Commission (ASIC) today released its quarterly update for 1 July to 30 September 2021.

During the quarter, ASIC focused on providing industry with regulatory guidance, maintaining market integrity, and targeting enforcement action to deter misconduct.

The regulator says it continues to actively monitor a range of platforms in order to identify and disrupt illegal market manipulation. Along with identifying and taking action against illegal activity, ASIC is reminding brokers and listed entities of their obligations and warning people of the tactics used by unscrupulous online promoters.

Let’s recall that, in September 2021, ASIC issued a warning that the recent trend of social media–led ‘pump and dump’ campaigns may amount to market manipulation. It reminded market participants and listed entities to report any suspicious activity and encouraged investors and consumers to report misconduct.

ASIC’s campaign also focuses on identifying and exposing some of the tactics used by online promoters to convince inexperienced investors to trade more or pay too much without properly considering the risks. In a recent segment on ABC Radio’s Melbourne Drive, our Chief Operating Officer Warren Day discussed common tactics such as ‘pump and dump’ schemes, gamification and copy trading.

The regulator voiced its concerns by recent increases in the number of new retail investors who may be unaware of their risk exposure.

There are now 1.25 million active online traders in Australia, of which 435,000 placed their first trade on a share market in the 2020 calendar year, according to research firm Investment Trends. Almost half (49%) of first-time investors surveyed were aged between 25 and 39, while 18% were under 25 years old.