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Finfluencer receives jail sentence for market manipulation
A finfluencer, known online as “Fibonarchery”, has been sentenced to two and a half years imprisonment after pleading guilty to charges of share manipulation and illegal dissemination of information.
Laura Dew
Editor’s note: This story was first published on Lawyers Weekly’s sister brand, Money Management.
This followed Mr Govinda pleading guilty to 23 charges of manipulation of shares listed on the Australian Securities Exchange and 19 charges of illegal dissemination of information relating to the manipulation.
Between September 2014 to July 2015, he used 13 different share-trading accounts, held in the names of friends and relatives, to manipulate the share price of 20 different listed stocks.
He also illegally disseminated information about his wash trades and dummy bids on HotCopper. He was seeking to increase (or pump) the share price, then selling (or dumping) the listed stocks at a higher price. This is often referred to as “pump and dump”.
The Australian Securities and Investments Commission (ASIC) noted a search of Mr Govinda’s premises in 2015 had uncovered a notebook that stated: “‘Buy big parcels of small cap cash backed resource shares at reasonable price, alert H.C Daytraders to the action sell to them at higher price at end of day.’ It also read ‘sell to self to create illusion of volume’ and ‘sell stock down to yourself then buy stock up to yourself. Buy cheap, make it expensive again, sell to others’.”
For actions like this that took place after March 2019, the penalty for this crime had been increased to 15 years imprisonment.
The Commonwealth Director of Public Prosecutions prosecuted the matter after a referral from ASIC.
ASIC deputy chair Sarah Court said: “Mr Govinda used a social media forum as an integral part of his market manipulation. He promoted certain shares that he had an undisclosed interest in, and which he had manipulated, with a view to selling out at a higher price.
“Individuals who look to social media, whether that be online forums or via platforms such as Instagram and Facebook, to promote stocks or financial products, should take notice of today’s court decision. Finfluencer conduct, whether by using social media to manipulate the market, using a platform to profit from promoting manipulation done by others, or to promote financial products you are not licensed to promote, can result in serious consequences.”
