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“ASIC has been working closely with mar- way forward for the company and the asset
ket operators to identify and disrupt pump- and people trust us to do that. A strategy like
and-dump campaigns, and we will continue that doesn’t always fit with the goals of a day
to target actions that threaten the integrity trader or retail investor.”
of markets and to take enforcement action If social media is now an essential tool for
where appropriate,” ASIC Commissioner companies to tell the positive angle on their
Cathie Armour said. “We expect anyone in- stories to new audiences, how do they tack-
volved in these campaigns to recognise the le negative reactions around falling share
potential impact on market integrity and to prices?
be aware ASIC monitors all trading on the Traditionally, it may have meant taking
ASX equity market on a real time basis.” phone calls, letters or emails from disgrun-
Reports in The Sydney Morning Herald in tled shareholders but as with elsewhere in
October suggest ASIC is even joining chat the digital world, in trading forums this frus-
rooms and forums to warn “finfluencers” tration can turn nasty.
they may be breaking the law. “I have had personal threats and accu-
Even here, companies could be liable for sations of unprofessional behaviour, but it
the regulator’s ire. is very hard to reason with them,” another
“That is why our advice to clients is al- chief executive told Paydirt. “The major
ways that they should at the very least negative is that you have no idea who you’re
monitor social media,” Tasker said. “Monitor dealing with. They can say what they like
what is said because ASIC guidelines state and while you may be able to control your
it is the responsibility of the company to fix narrative, you can’t control theirs. If you do
Michael Anderson any misleading statements which emerge.” let comments get to you, you end up under-
Aylin Amey is a foreign exchange special- mining the confidence in your message.”
new retail investors. ist by profession but has spent the last few Tasker advises not to take individuals on,
Keith Goode has been a mining research years building up a portfolio of resources no matter how tempting to executive teams
analyst for more than three decades, build- stocks. She joined Twitter specifically to who stand accused of misdeeds.
ing up a sizeable following through more gain information about the companies on “We always advise against any individual
traditional means. However, since embrac- her watchlist and others she had missed. contact when there is a negative message
ing Twitter a few years ago, he has seen his Her strategy was to follow successful in- because that can lead to circles of prob-
scope widen. vestors and while this has served her well, lems,” he said. “If we see commonality of
“I have around 3,100 followers but if I tweet she is still very wary of many of the “finflu- misinformation, we would rather clients do
something and it’s retweeted by some- encers” she comes across on different plat- a webinar or Zoom call to tell everyone what
one with a larger following it spreads fast,” forms. is wrong with a certain viewpoint being pro-
Goode told Paydirt. “I probably average “I found it very useful to follow individuals, moted in online forums.”
300,000 views of my tweets each month as long as they are genuine investors and Like many other corners of social me-
but when I recently tweeted something on a not pumpers, although on Twitter the major- dia, the FinTwit platform is fertile ground for
particular company with a big Twitter follow- ity of people are genuine investors,” Amey, conspiracy theories and activism fuelled
ing it was retweeted and had 30,000 views who has more than 1,600 followers of her by people who have little knowledge of the
within 24 hours.” own, told Paydirt. “It allows you to keep up specialist areas they comment on.
And, just as in the consumer world, busi- to date but also follow where and why senti- “They [online trading platforms] have re-
nesses can pay influencers to promote their ment is heading. moved the decision-making and trading
stock. “It is on Facebook and others where I’ve process of old and replaced it with spon-
“There are a number of ‘finfluencers’ seen some questionable things; forums taneous decisions with no controls around
who understand and play within the rules where there are lots of day traders and market placing orders and advice on wheth-
and so using them to promote is no differ- pumpers. You have to take everything you er a trade meets an investor’s risk profile or
ent to any other channel,” Tasker said. “So, see with a grain of salt.” financial goals,” one active Twitter user and
if they reach an audience you are targeting Pump-and-dump is only part of the prob- respected investor told Paydirt.
then you should have no problem. Of con- lem. Three of the mining executives Paydirt The managing director of another junior
cern are the groups or individuals who are spoke to identified down-ramping – the act company agreed.
perhaps new to the market but don’t un- of talking negatively about one stock in or- “It is clear that you are dealing with a num-
derstand the obligations of companies. If a der to promote a peer company – as a fre- ber of non-sophisticated investors. If they
company is paying an influencer, it had an quent problem in forums such as Hot Cop- are trading through their online platforms,
obligation to ensure they play by the rules.” per and Facebook. it means they are not getting professional
The Australian Securities & Investments Even if online activity isn’t nefarious, it can advice and perhaps don’t understand fully
Commission (ASIC) has begun paying still be very difficult to match company strat- what can and can’t be done within regula-
more attention to the market segment. egy with investor expectation, particularly tions,” they told Paydirt.
In June, ASIC chairman Joe Longo said given the proportion of day traders posting “We have been accused of looking after
the role “finfluencers” were playing was an comments compared to long-term holders. ‘our mates’ for undertaking placements
“area of big concern”. “Understanding their motivation is dif- with brokers but that’s not how
ASIC has continued to step up its moni- ficult,” one executive said. “While they the market works.
toring of online platforms. In September, it can move the price on any given “Individuals using on-
issued a statement declaring it was watch- day, we are building a 5-10 line platforms wouldn’t
ing online forums for activity of “pump-and- year business plan, mak- typically be offered
dump” strategies. ing decisions on the best what brokers’ clients

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