After WallStreetBets, Australia’s securities regulator warns share trading forums
Byron Kaye, 27 April 2021
SYDNEY (Reuters) – Australia’s securities regulator has contacted internet share trading forums to question them about policing of “pump and dump” scams on their platforms, a sign of growing scrutiny of an investment subculture that soared during pandemic lockdowns.
The Australian Securities and Investments Commission (ASIC) told Reuters it has boosted surveillance of local retail trading internet chatrooms that have sprung up since the “WallStreetBets” Reddit chatroom was linked to wild U.S. stock fluctuations this year.
That has led to discussions between the regulator several operators of the profanity, irony and meme-laden chat forums – who often operate anonymously – about their liability if they allow share inflation schemes to flourish.
“If we see concerning conduct that looks as though it was a clear ‘pump and dump’ that would result in a market manipulation case, there is appetite within ASIC to take those matters forward,” said Calissa Aldridge, ASIC’s senior executive leader of market supervision.
The strategy shows how a trading frenzy around U.S. video game chain GameStop Corp and other so-called “meme” stocks in recent months has reshaped enforcement practices by regulators around the world.
Retail investors currently account for 15% of trades on Australia’s A$2 trillion ($1.6 trillion) stock market, compared to 10% before COVID-19 lockdowns sent most workers and students home. The proportion peaked at 20% in January amid reports of massive gains associated with WallStreetBets, ASIC says.
