ASX flags surge in fake reports on social media

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Bank interest rates have fallen through the floor, super is struggling to deliver positive returns on our investments and many people are turning to the stock market in the hope of adding to their nest eggs.

And where there is an upturn in activity, there is usually a quick response from scammers.

Thousands of Australians are joining online communities dedicated to sharing the latest news, analysis and opinions about listed companies. But the Australian Securities Exchange (ASX) is warning that information posted by unverified accounts and users may not be trustworthy.

It says Australians need to be extra cautious and may be basing investment decisions on false or misleading information.

“If you come across an article that appears to be fake or misleading, check for announcements by the company on ASX’s market announcement platform or contact the company directly,” an ASX spokesman said.

Business Insider reports that there has been a surge in images posted to Facebook of newspaper articles with manipulated headlines and content, “allegedly in an effort to game the market”. A member of the Facebook group ASX Small Cap & Micro Cap Investors confirmed he had seen fake information posted to another group.

“Pretty creative,” he wrote. “But def not on.”

Business Insider explains that there are dozens of Facebook groups aimed at ASX investors, many with tens of thousands of members. The groups are filled with questions for other members, news articles about the latest developments and memes.

Many groups stipulate that members should not provide financial advice, but that is regularly ignored. The groups can be set up and joined by anyone, so there is little oversight as to what is posted on them.

An ASX spokesman confirmed it was aware of examples of fake or misleading information circulating online.

Its job, he said, is to ensure that investors have access to correct information to make informed choices.

“We constantly monitor companies’ price and volume movement, liaise with listed companies, grant trading pauses and halts to help them manage their disclosure obligations, and encourage them to respond factually and proportionally via the market,” the spokesman said.

He said the ASX monitored any sudden shifts in company prices and contacted companies to investigate if that occurred. Ultimately, it had no powers to penalise an individual or organisation, although “we may assist ASIC with any regulatory investigation as required”.

Moneysmart offers guidance on how to spot an investment scam.

It says there are three main types of investment scams:

  • the investment offer that is completely fake
  • the investment that exists, but the money you give the scammer doesn’t go towards that investment
  • the scammer who says he/she represents a well-known investment company, but is lying.

It says scams can be very difficult to spot and can feel legitimate in the moment. A scammer may tell you they are offering:

  • high and quick returns or sometimes tax-free benefits
  • share, mortgage, real estate or virtual currency investments, ‘high return’ schemes, option trading or foreign currency trading
  • an opportunity with no risk or low risk, because you will be able to sell any time, get a refund for non-performance, have insured or ‘guaranteed’ transactions, be able to swap one investment for another
  • inside information
  • the opportunity to invest before a public float or discounts for early bird investors.

The investment offer may be a scam if the person:

  • does not have an Australian financial services (AFS) licence
  • or says they don’t need one
  • calls you repeatedly, keeps you on the phone, or emails you a lot
  • says you need to make a quick decision or you’ll miss out on the deal
  • offers you professional-looking prospectuses, brochures, share certificates or receipts, but their prospectus isn’t registered with ASIC.

If you spot any of these signs, says MoneySmart, hang up the phone or delete the email. If you manage to record any of the scammer’s details, report them to the Australian Securities and Investments Commission (ASIC).

Have you taken a new or renewed interest in the stock market? Have you spotted anything that made you suspicious?

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Written by Janelle Ward

2 Comments

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    Who takes financial advice (or any advice) from unsolicited social media feeds?


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