What is share sale fraud?
According to the Australian Securities and Investments Commission (ASIC), share sale fraud refers to the fraudulent activity of a person who is not who they claim to be, selling shares that do not belong to them.
How does share sale fraud occur?
Generally, share sale frauds have the following indicia:
- A person claims to be someone else.
- The person creates a trading account with a market participant or their intermediary. Stolen or fraudulent identity documents are used by the person to open a trading account, and the security reference number is fraudulently obtained from a share registry statement.
- The market participant or their intermediary then sells the person issuer-sponsored shareholding. This is usually done as a one-off trade.
- The bank account nominated for settlement, which is purportedly in the name of someone else, is the person’s own account.
Is share sale fraud a criminal offence?
There are several potential state-based and Commonwealth criminal offences which may be applicable to a share sale fraud matter. Share sale frauds often involved cybercrime and identity theft, which expands the scope of applicable offences. The Australian Federal Police (AFP), the Serious Financial Crime Taskforce (SFCT) and ASIC have the power to conduct investigations into suspected share sale frauds. The investigator and extent of the investigation will depend on the scale and specific facts of the suspected share sale fraud.
Share sale fraud is generally reported to ASIC or the Australian Transaction Reports and Analysis Centre (AUSTRAC) by way of a suspicious matter report.
How can we help?
Obtaining expert legal advice is essential in cases of share sale fraud as ASIC, the AFP, and the SFCT have wide ranging information gathering powers to investigate fraud, which may include compelling you to attend an examination and provide information against your will. The role of a criminal defence lawyer in these circumstances is focused on ensuring you are treated fairly and in accordance with your legal rights. It is a specialised service distinct from the provision of commercial services provided by commercial lawyers.
Nyman Gibson Miralis provides expert advice and representation to individuals charged with share sale fraud.
Contact us if you require assistance.