A trader and online personality has been sentenced to two-and-a-half years imprisonment after pleading guilty to 23 charges of market manipulation and 19 charges of illegal dissemination of information relating to the manipulation.
Gabriel Govinda, who went by the online handle “Fibonarchery,” used the stock forum HotCopper to pump and dump 20 different listed stocks using 13 different share trading accounts between September 2014 to July 2015.
Govinda will be released immediately on a five-year recognisance of $5,000 and fined $42,840.
Corporate watchdog ASIC said Govinda’s market manipulation activity on HotCopper was in breach of s1041D of the Corporations Act, when he traded between the accounts he controlled (wash trading); and when he used fake, “prop,” or “dummy” bids to falsely increase the perceived demand, and ultimate price, for listed stocks.
He also illegally disseminated information about his wash trades and dummy bids on HotCopper to pump the share price before dumping the listed stocks at a higher price.
“Mr Govinda used a social media forum as an integral part of his market manipulation,” ASIC Deputy Chair Sarah Court said. “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.”
ASIC’s search of Govinda’s premises in 2015 unearthed a notepad which detailed his use of HotCopper to promote his market manipulation.
The note read, “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.”
Other entries said he would “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.”
The Commonwealth Director of Public Prosecutions prosecuted the matter after a referral from ASIC.
