ASIC Flags a Resurgence of Pump-and-Dump Activity in Global Small-Cap Trading

ASIC is monitoring a rise in coordinated pump-and-dump schemes involving small-cap securities, many of them thinly traded and listed outside Australia, where price movements can be engineered with limited capital.

Reports received by the regulator point to organised promotion rather than isolated misconduct. In several cases, price spikes followed concentrated bursts of messaging across social platforms and private chat groups, with trading activity peaking shortly before promoters exited their positions. The pattern leaves late buyers exposed to sharp losses once liquidity collapses.

ASIC has identified recurring operational features. Promoters focus on stocks with low daily turnover, allowing misleading claims or rumours to produce outsized price effects. Advertising tools on social media are used to target retail traders directly, while messaging apps are used to shift discussions into private channels. Some cases involve the misuse of brokerage accounts, further obscuring responsibility for trades.

The activity is not confined to Australia. ASIC has raised the issue with regulators in New Zealand, the United States, Europe, and Asia after similar schemes appeared across multiple markets. Cross-border listings and differing regulatory frameworks make rapid intervention difficult, particularly when schemes unfold over hours rather than days.

Recent sentencing of individuals linked to coordinated manipulation of Australian-listed shares underscores the enforcement risk for promoters, but regulators acknowledge that investor losses often occur before detection. ASIC estimates that retail traders exiting artificially inflated positions have historically incurred losses running into millions of dollars each month.

The regulator’s focus on pump-and-dump activity reflects a broader shift in market abuse. Manipulation now relies less on public hype and more on targeted distribution, rapid execution, and fragmented visibility, making prevention harder and post-event enforcement more common.