Four individuals have been charged with conspiracy to manipulate Australian share prices through a coordinated “pump and dump” scheme organized via the messaging app Telegram, Australia’s securities regulator announced today (Tuesday).
Syed Yusuf, Larissa Quinlan, Emma Summer, and Kurt Stuart face criminal charges for allegedly artificially inflating penny stock prices before selling shares at a profit. The charges, filed in Sydney’s Downing Centre Local Court, carry maximum penalties of 15 years imprisonment and fines exceeding $1 million.
The Australian Securities and Investments Commission (ASIC) alleges the defendants formed a private Telegram group to select stocks, then promoted them to a public channel called “ASX Pump and Dump Group.” Over three weeks in September 2021, nine stocks were allegedly targeted.
Joe Longo, the Chairman of ASIC
“Market manipulation is illegal. Pump and dump schemes are a form of financial fraud, eroding investor wealth, threatening the integrity of our markets and potentially the Australian economy more broadly,” said ASIC Chair Joe Longo.
The regulator said it monitored the scheme using sophisticated surveillance systems that integrate trade and third-party data. ASIC had previously warned Telegram users about potential legal consequences of such activities. A few months later, the regulator detailed how it managed to unravel and lead to the dissolution of a pump-and-dump group, in this specific case in the cryptocurrency market.
“Coordinated attempts to manipulate the market is a criminal offence,” added Longo.
The defendants also face charges of dealing with proceeds of crime related to profits from the alleged scheme. Their case was adjourned to July 30 for a detention application hearing.
Telegram, WhatsApp and Discord Targeted by Scammers
Although Facebook has been more effective in targeting traders compared to Telegram, over 60% of individuals on Telegram who were involved in trading ended up losing money, according to a joint study conducted by Finance Magnates and FXStreet several months ago. While the proportion of scam victims losing money is similar on both Telegram and WhatsApp, Telegram sees more traders targeted due to its numerous active trading channels and groups.
Discord has also gained popularity among traders. What used to be seen as just another platform for gamers, has now transformed. Today, Discord is a prime gathering spot for retail FX/CFDs and cryptocurrency traders who convene to discuss strategies, share trading signals, and navigate market fluctuations together.
Moreover, the private and anonymous nature of Discord’s channels has facilitated questionable trading activities. The platform has become infamous for hosting pump-and-dump schemes, where influencers promote low-volume assets to drive up prices before selling off their stakes at peak values.
Turning to ASIC, since the initiation of its capability to shut down scam websites in July 2023, nearly 3,500 fraudulent investment sites have been shut down. This effort represents a significant advance in shielding Australians from online investment scams.
