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By Byron Kaye

SYDNEY (Reuters) -Australia’s securities regulator has contacted web share buying and selling boards to query them about policing of “pump and dump” scams on their platforms, an indication of rising scrutiny of an funding subculture that soared throughout pandemic lockdowns.

The Australian Securities and Investments Commission (ASIC) instructed Reuters it has boosted surveillance of native retail buying and selling web chatrooms which have sprung up because the “WallStreetBets” Reddit chatroom was linked to wild U.S. inventory fluctuations this yr.

That has led to discussions between the regulator and a number of other operators of the profanity, irony and meme-laden chat boards – who usually function anonymously – about their legal responsibility if they permit 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,” mentioned Calissa Aldridge, ASIC’s senior government chief of market supervision.

The technique reveals how a buying and selling frenzy round U.S. online game chain GameStop Corp (NYSE:) and different so-called “meme” shares in latest months has reshaped enforcement practices by regulators world wide.

Retail buyers at present account for 15% of trades on Australia’s A$2 trillion ($1.6 trillion) inventory market, in comparison with 10% earlier than COVID-19 lockdowns despatched most staff and college students house. The proportion peaked at 20% in January amid stories of large positive factors related to WallStreetBets, ASIC says.

When suspected market manipulators operated in boards anonymously, ASIC was ready to establish them by cross-checking the claims they posted on-line with verified buying and selling knowledge and Australian Taxation Office information.

“We have seen lots of examples … where there’s people who are talking about what they’ve just done with their trading – some post a snapshot of their trading accounts with trades that have gone through – in some cases we can reverse engineer that (to) look for the identities of the individuals,” mentioned Aldridge.

‘ROCKET EMOJIS’

Moderators of Reddit discussion board ASX_Bets, one of many nation’s hottest buying and selling chatrooms with 68,400 nameless members, mentioned they spoke to an ASIC consultant in March.

ASIC requested they delete a joke within the web page’s Frequently Asked Questions that “lots of Rocket Emojis were indicators of a winning stock”, however “other than this, we have not changed any behaviors nor were we requested to,” ASX_Bets moderators mentioned in an e-mail, with out giving their names.

The moderators mentioned the group, which began in March 2020, bans members from “pumping” shares and attaches notifications for firm representatives who put up “to make it clear they are not a neutral party”.

John Rye, founding father of Facebook (NASDAQ:) group “Asx Stock Tips”, which has 20,100 members since beginning earlier this month, mentioned he had not been approached by ASIC and was unconcerned about any consideration from the regulator.

In a Facebook chat, he mentioned he frequently deleted “unhelpful” posts and warned about scammers however didn’t consider members of his group might affect inventory costs since they have been “too stupid to do it here” and “the amount of money and co-ordination is too much”.

($1 = 1.2840 Australian {dollars})

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