Several participants in aptly named online chat groups, “ASX Pump and Dump Group” and “ASX Pump and Dump Channel,” have pleaded guilty to criminal charges in connection with penny stock manipulations.
The Australian Securities and Investments Commission (ASIC) — which originally referred the case for criminal prosecution — said that four people it alleged were involved in coordinated pump-and-dump trading in August and September 2021 have now pleaded guilty in Downing Centre Local Court to conspiracy to “commit market rigging and dealing with the proceeds of crime.”
The regulator alleged the defendants “formed a private group on the Telegram app where they discussed and selected penny stocks to promote to the public Telegram groups” devoted to pump-and-dump schemes.
“Over three weeks in September 2021, nine announcements were made to boost the stock prices of selected ‘target’ stocks. To different degrees, the defendants purchased the target stock prior to the pump announcement with the intention that the announcement and public purchases would increase the share price to an artificial target — and then sold their stock once the price of the stock had substantially increased,” ASIC alleged.
The next hearing in the case is scheduled for July 21 in Sydney District Court to obtain a sentencing date.
“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,” said ASIC chair Joe Longo in a release.