An ASX shares investor who used 13 different stock trading accounts has pleaded guilty to market manipulation.
Gabriel Govinda on Monday pleaded guilty to a total of 42 charges relating to manipulation of listed shares and illegal dissemination of information on such manipulation.
The Australian Securities and Investments told the court that Govinda was known on online stock tip forums as Fibonarchery, and publicised increased demand for certain stocks.
He would set this up by putting in many fake bids on shares using his many stockbroking accounts.
Govinda also sold and bought ASX shares between the different accounts that he possessed, in a practice known as "wash trading".
The investor now faces up to a 10-year prison sentence. In addition, he can also cop a fine of $765,000.
Govinda's offences occurred over 2014 and 2015. In 2019, the maximum penalty was increased to 15 years' jail.
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Accused posted 'dummy bids are all part of the fun and games'
The investments watchdog accused Govinda of doing this in an attempt to "pump and dump" — artificially drive up the share price in order to sell them for a profit.
This is the first time in Australian history that a person has been convicted of such charges under s1041D of the Corporations Act.
In one message on a Hotcopper forum, Govinda said "dummy bids are all part of the fun and games and cat and mouse of the stock market!".
With many retail investors joining the share market since the onset of the COVID-19 pandemic, ASIC had warned many times about illegal "pump and dump" practices.
"ASIC has recently observed blatant attempts to pump share prices, using posts on social media to announce a target stock, a designated time to buy and a target price or percentage gain to be reached before dumping the shares," stated the commission.
"In some cases, posts on social media forums may mislead subscribers by suggesting the activity is legal."
Govinda's case has been adjourned to 29 July for a mention hearing.
The Commonwealth Director of Public Prosecutions is acting as prosecutor after an ASIC investigation and referral.
