Four people have been criminally charged for their alleged involvement in a coordinated pump-and-dump scheme following an investigation by the Australian Securities and Investments Commission (ASIC).
Syed Yusuf, Larissa Quinlan, Emma Summer and Kurt Stewart were charged at Downing Center Local Court with conspiring to commit market manipulation and false trading by artificially inflating the price of Australian shares before dumping them.
They are also charged with handling the proceeds of crime in relation to the money they each received from the sale of the shares in the pump and dump operation.
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They face a maximum penalty of 15 years in prison and a fine of more than $1 million for market manipulation.
According to ASIC, the defendants formed a private group on the Telegram app where they discussed and picked stocks to advertise the Telegram group to the public, called the "ASX Pump and Dump Group".
Nine announcements were made to the ASX Pump and Dump Group over three weeks in September 2021. to increase the selected shares.
ASIC has warned traders in a Telegram share market chat room next month that they may be breaking the law by seeking to organize share price manipulation.
It is alleged that the defendants purchased some or all of the stock with the intention of "pumping up" the stock price to an artificial target and then selling it after the stock price had risen substantially.
"Market manipulation is illegal. Pump and dump schemes are a form of financial fraud, undermining investor wealth, threatening the integrity of our markets and potentially the wider Australian economy,” ASIC Chairman Joe Longo said.
“Maintaining the integrity of our financial markets in Australia is a priority for ASIC.
“ASIC monitors the cleanliness of our markets and we take decisive action to disrupt activities that may affect cleanliness. That is why we have taken the action of entering social media forums and posting directly to warn members that their actions may be breaking the law.
He added that coordinated attempts to manipulate the market remained a criminal offence.
The matter is being pursued by the Director of Commonwealth Prosecutions following a referral by ASIC in December 2022.
It has been postponed to 30 July 2024. for a request for remand in respect of each of the accused.
They are charged with handling the proceeds of crime in relation to the money each of them received from the sale of the shares subject to the pump and dump operation, under section 400.4 (1) of the Penal Code, and conspiracy to commit market manipulation and false trading, under s 11.5(1) of the Criminal Code (Cth) and s 1041B(1)(b) of Corporations Act 2001 (Cth).
