A social media influencer has been sentenced to two-and-a-half years imprisonment for manipulation of the stock market.
The Melbourne County Court on Wednesday handed down the punishment to Gabriel Govinda, who is known online as Fibonarchery, for 23 charges of manipulation of ASX shares and 19 counts of illegal dissemination of information.
He had earlier pleaded guilty to those charges.
Govinda was found to have manipulated the prices of 20 different ASX shares through posts on the investor forum HotCopper — an activity colloquially known as "pump and dump".
He thus becomes the first person to be sentenced for breaching s1041D of the Corporations Act.
"Mr Govinda used a social media forum as an integral part of his market manipulation," said ASIC deputy chair Sarah Court.
"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."
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ASIC officers found note detailing the crimes
The court heard that Govinda used 13 different share trading accounts under the names of relatives and friends to manipulate the stocks.
He was found to have acted illegally by trading between the accounts he controlled, which is a practice called "wash trading", and putting in dummy bids to "falsely increase the perceived demand" for a stock.
Govinda then publicised this fake demand on HotCopper in order to inflate the share price so that he could then sell them for a profit.
During a search of his premises in 2015, Australian Securities and Investments Commission officers found a notepad that described his strategy.
"Buy big parcels of small cap cash backed resource shares at reasonable price, alert HC Daytraders to the action[,] sell to them at higher price at end of day," read the note.
The document also said "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," wrote Govinda.
Govinda's infringements occurred before a March 2019 reform that saw the maximum jail time for market manipulation increased to 15 years.
The court, on the basis of a five-year recognisance, released Govinda immediately.
