A prominent online investment personality could be jailed after pleading guilty to an illegal pump-and-dump scheme.
Gabriel Govinda, known online as Fibonarchery, pleaded guilty to 23 charges of stock manipulation and 19 charges of illegal dissemination yesterday.
The Melbourne man is the first person to be convicted under s1041D of the Corporations Act.
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Govinda used 13 different share trading accounts held in the names of friends and relatives to boost the share price of 20 different stocks.
By trading between different accounts he controlled, Govinda falsely increased the perceived demand and price of the stocks.
He then bragged of his actions on the chat forum HotCopper.
"Dummy bids are all part of the fun and games and cat and mouse of the stockmarket!" Govinda wrote in one post.
He is facing a maximum penalty of 10 years' prison and a fine of up to $765,000, or both.
The maximum penalty was lifted to 15 years' prison in 2019, but Govinda's pump-and-dump scheme was committed earlier.
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What is a pump-and-dump scheme?
A pump-and-dump scheme is a plot where a person uses social media or other means to promote a particular stock.
When the price rises because of this demand, the person then sells the stock they own for a profit.
Such activity is illegal on the stock market.
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The subject of the film The Wolf of Wall Street, Jordan Belfort, was famously jailed for a pump-and-dump scheme in the 1990s.
Pump-and-dump schemes are increasingly common on the unregulated cryptocurrency markets.
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