The corporate regulator has secured guilty pleas in a case it brought against four investors who conspired in a “pump-and-dump” scheme.
Larissa Quinlan, Emma Summer, Kurt Stuart and Syed Yusuf pleaded guilty in the Downing Centre Local Court to conspiracy to commit market rigging and dealing and now face sentencing, with a maximum punishment of 15 years in prison and a fine exceeding $1 million.
The conspiracy is referred to colloquially as a “pump-and-dump” scheme, where investors attempt to inflate a stock via social media to increase interest from other investors and then make a profit selling at the increased price.
Quinlan, Summer and Stuart were part of the conspiracy from around 28 August 2021 to 22 September 2021 and Yusuf from 17 September to 22 September 2021.
Stuart and Summer pleaded guilty to one count of dealing with money or other property that was proceeds of crime to the value to $10,000 or more.
Quinlan and Yusuf pleaded guilty to one count of dealing with money or other property that was proceeds of crime of $1000 or more. Yusuf also pleaded guilty to one count of dealing with money or other property that was proceeds of crime totalling $10,000.
ASIC chair Joe Longo said the guilty pleas were a reflection of the strength of the case as well as its commitment to acting against unlawful conduct undermining market integrity.
“ASIC takes breaches of the market manipulation rules very seriously and as demonstrated in this matter, we will not hesitate to take enforcement action where appropriate,” Longo said in a media release released Tuesday afternoon.
The four were charged in July 2024, after participating in the coordinated scheme in August and September of 2021.
The scheme was organised via a social media and messaging app Telegram under the group chat name “ASX Pump and Dump Group”.
ASIC said that over the three weeks, nine announcements were made in the group to pump up the chosen stocks.
ASIC affirmed in September 2021 its commitment to cracking down on groups such as this one, and in October 2021 the regulator warned traders in a Telegram chatroom that by seeking to coordinate stock market manipulation they may be committing a crime.
“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,” Longo said at the time.
“ASIC monitors the cleanliness of our markets, and we take decisive action to disrupt activities that may impact cleanliness.”
ASIC referred the case to the courts in December 2022, but the regulator has since been criticised for a lack of enforcement action and effectiveness in regulating the industry.
The action from the regulator is part of an enforcement priority that sought to crackdown on unlicensed financial advice, including so-called “finfluencers”.
