fraud finance securities
Stocks and social media (pump &amp; dump?)
<p>Some wealthy and famous individuals have the power to influence the stock market simply by posting on social media. For example, a famous billionaire tweets &quot;I'm excited to see what ACME develops this year&quot;, and the Acme Corporation's stock price (at least temporarily) goes through the roof.</p>
<p>Now imagine that the billionaire capitalizes on the inflated stock price and sells for a big profit. Is this illegal, and if so what type of fraud would it be classified as? It <em>feels</em> like a pump &amp; dump, but doesn't meet some of the typical criteria for a pump &amp; dump:</p>
<ul>
<li>There is no orchestrated campaign, merely a single social media post</li>
<li>The individual in question hasn't made any false / misleading claims</li>
<li>The individual in question hasn't advised anyone else to buy the stock</li>
</ul>
<p>For comparison, John McAfee was <a href="https://www.theverge.com/2021/3/5/22315494/john-mcafee-fraud-securities-scheme-charges-cryptocurrency" rel="nofollow noreferrer">charged for running a pump &amp; dump</a> on Twitter, but his campaign did meet the traditional criteria for a pump &amp; dump.</p>

<p><a href="/questions/tagged/australia" class="post-tag" title="show questions tagged &#39;australia&#39;" rel="tag">australia</a></p>
<h2><a href="https://www.researchgate.net/publication/282451433_The_Regulation_of_Market_Manipulation_in_Australia_A_Historical_Comparative_Perspective" rel="nofollow noreferrer">MARKET MISCONDUCT</a> AND OTHER PROHIBITED CONDUCT RELATING TO FINANCIAL PRODUCTS AND FINANCIAL SERVICES</h2>
<p>The <em>Corporations Act</em> deals with this in Part 7.10.</p>
<p>The activity you describe is <strong>not</strong> an offence.</p>
<p>The closest is that of &quot;Inducing persons to deal* in <a href="http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s1041f.html" rel="nofollow noreferrer">s1041F</a> but that requires &quot;making or publishing a statement, promise or forecast if the person knows, or is reckless as to whether, the statement is misleading, false or deceptive.&quot; You have specifically stated that it isn't false or misleading and I agree with you - a person can be legitimately excited about upcoming product releases.</p>
<p>Now, if the statement goes further with, say &quot;I'm buying ACME stock!&quot; then it is probably crossing the line; particularly if they had no intention of doing so at the current price.</p>
