General informationThis page describes the law and patterns from published ASIC cases. It is not advice about any trade or investment. ASIC administers these laws, and a lawyer can say how they apply to particular conduct.
The six sections, side by side
Each section targets a different kind of conduct, and the Act says each one works on its own: none of them limits the reach of the others.
| Section | The conduct | Consequence |
|---|---|---|
| 1041A Market manipulation | Taking part in any transaction, or set of transactions, that creates or is likely to create an artificial price for trading in financial products on a market operated in this jurisdiction, or that keeps a price at an artificial level. | Offence and civil penalty provision |
| 1041B False trading | An act or omission that creates, or is likely to create, a false or misleading appearance of active trading, or about the market for or price of financial products. | Offence and civil penalty provision |
| 1041C Market rigging | A fictitious or artificial transaction or device that results in a price being maintained, inflated or depressed, or in price fluctuations. | Offence and civil penalty provision |
| 1041D Spreading word of illegal transactions | Circulating a statement that a price will rise, fall or hold because of a transaction that breaches these rules, where the person or an associate did the transaction, or has been or may be paid for spreading the statement. | Offence and civil penalty provision |
| 1041E False or misleading statements | A statement that is false or materially misleading and likely to induce people to deal, or to move or hold a price, made by someone who does not care whether it is true or who knows, or ought reasonably to know, that it is false or misleading. | Offence; can also found a civil claim for loss |
| 1041F Inducing people to deal | Inducing someone to deal by a statement known to be, or recklessly, misleading, false or deceptive; by dishonestly concealing material facts; or by stored information known to be false. | Offence; can also found a civil claim for loss |
Sections 1041A to 1041E reach conduct “whether in this jurisdiction or elsewhere”. Section 1041F covers inducing done in this jurisdiction.
Wash trades and matched orders
Section 1041B names two kinds of conduct that are taken to create a false or misleading appearance of active trading. The list is not complete; other conduct can do it too.
- No change of owner. Buying or selling in a way that involves no change in beneficial ownership. The Act treats ownership as unchanged if someone with an interest in the products before the trade, or their associate, still has an interest after it.
- Matching your own order. Offering to buy or sell at a set price when you, or an associate you know of, have made or plan to make an opposite offer for substantially the same number at substantially the same price.
For market rigging under section 1041C, the Act adds that a transaction is not saved from being fictitious or artificial merely because the parties meant it to take effect on its terms.
A pattern from a published case
ASIC publishes the outcome of its cases in media releases. The pattern below is taken from one of them.
Pump and dump by group chat
In a case ASIC reported in December 2025, the organisers of a scheme used messaging-app group chats to push up the prices of Australian shares and then sold at the inflated prices. Four people pleaded guilty to conspiracy to commit market rigging and to dealing with the proceeds of crime, and were sentenced to terms of imprisonment of between 14 months and 2 years, served in the community by intensive corrections orders with community service; three were also fined, and the fourth was ordered to pay a pecuniary penalty.
ASIC says it has seen social media posts used to coordinate pump and dump activity, naming a stock, a time to buy and a price target before the selling starts, and that some posts suggest to members that the activity is legal. ASIC now posts its own messages into some of these channels.
How a pump and dump scam unfolds
In July 2026 ASIC warned about a rise in pump and dump scams that borrow the names and faces of well-known finance figures and institutions. It set out the common pattern, which runs in this order:
- A social media post offers an investment opportunity.
- The post borrows the picture of a familiar market commentator, investor or bank to seem credible, though the opportunity itself is fake.
- Clicking it leads to a group on a messaging platform.
- Someone posing as the expert, or as their assistant, gives share tips, mostly on overseas exchanges.
- Other members, often part of the scam, post about profits from earlier tips.
- People buy the tipped shares and the price rises; the scammers often ask for proof of purchase.
- The scammers sell their own shares at the inflated price, and the price falls sharply.
- The buyers are left with shares worth far less than they paid.
ASIC’s chair put the warning plainly. Anyone getting share tips in a chat app, above all after replying to a social media post, “should assume it’s a scam”.
Recovering a loss
A person who suffers loss because someone breached section 1041E, 1041F, 1041G or 1041H can sue to recover it, from the person who breached the section or anyone involved in the breach, whether or not anyone has been convicted. The action must be started within 6 years after the cause of action arose.
Each of sections 1041A to 1041F carries the same maximum prison term as insider trading, 15 years, and sections 1041A to 1041D are civil penalty provisions as well. The amounts are set out in the guide to penalties. Reporting suspected manipulation to ASIC is covered in the guide to reporting misconduct.