Posting rumours on ASF

[Joe Blow]

Posting unverified rumours on ASF is simply not on.

If you are not prepared to identify your source or confirm a rumour with the company involved then please do not post it on the forums. Just for the record, anonymous forum chatter and unidentified 'friends' or 'associates' do not qualify as a legitimate source.

Some rumours, of course, do turn out to be accurate but many are simply made up and used to ramp stocks up or down. It is this aspect that troubles me and is the reason I do not want them posted here at ASF.

 

[rederob]

Posting unverified rumours on ASF is simply not on.

I guess that means we can post all the rumours we like if we verify them.
I especially like the announcements about rumours that discount the rumours because they will make announcements when they have something to announce.

I remain confused: If we start a rumour that we can can personally verify, but can't reveal our sources, we can't post it.
So if the Financial Review reports a rumour (and they refuse to identify a specific source), we can post that rumour?

Does a rumour that we can verify have more veracity than a forecast we can justify even if we can't quantify the probability of its accuracy?

 

[Joe Blow]

Rob, if someone can refer to something that is published or identify an actual source (broker, relevant expert etc) I have no problem with that 'rumour' being mentioned.

Unfortunately, as you can imagine, on a forum such as this, people are prone to making up 'rumours' or passing on 'rumours' from unnamed sources. This is beginning to become a problem here and I need to try and clarify the issue somewhat.

If it is published in The Financial Review then yes, it can be mentioned on ASF as it has an identifiable source.

 

[Joe Blow]

Perhaps the word 'unverified' was a poor choice.

What I mean, is that if people are going to post a rumour on ASF, it has to be attributable to someone and they have to be able to demonstrate that with a link or a reference to a published source.

Personally, I would prefer that people stuck solely to verified information but I understand that is a little unrealistic.

 

[Duckman#72]

Does a rumour that we can verify have more veracity than a forecast we can justify even if we can't quantify the probability of its accuracy?

Nice question Rederob - but surely tongue in cheek.

Whether or not a rumour is veracious is irrelevant and a red herring.

There will always be rumours that are proven correct and some will prove to be rubbish. Just as there will always be sourced pieces of information that turn out to be correct and many that will be wrong.

The only relevant issue is the source/basis of the rumour.

Joe and the moderators will never stop posts that in the fullness of time are proven wrong (nor are they trying to do this), but they can reduce posts that cannot be substantiated. Which is a pretty good start.

Duckman

 

[rederob]

Joe
Most companies have clearly stated policy on rumours, such as one from PDN:

Policy on Rumours
The Company does not comment, affirmatively or negatively, on rumours. This also applies to rumours on the Internet. The Company will respond consistently to any rumours, saying, “It is our policy not to comment on market rumours or speculation.” Should a stock exchange request that the Company make a definitive statement in response to a market rumour that is causing significant volatility in the stock, the Disclosure Control Committee will consider the matter and decide whether to make a policy exception.

I respect where you are coming from.
However, given the nature of posters, and ratbag rampers, and the blurring of the two, I daresay your work will continue to be cut out for you.

 

[Joe Blow]

I respect where you are coming from.
However, given the nature of posters, and ratbag rampers, and the blurring of the two, I daresay your work will continue to be cut out for you.

Rob, I never imagined how difficult it would be to keep a lid on ramping and rampers. It is overwhelming myself and the mods to the point where we just can't keep track of it all, let alone deal with all of it. As much as we would like to be able to we just can't keep track of every thread.

ASF members can help us by reporting ramping when you see it. You will notice this symbol '

' in the top right of every post. Clicking on it enables members to report particular posts.

Any help is very much appreciated.

 

[The Mint Man]

Rob, I never imagined how difficult it would be to keep a lid on ramping and rampers. It is overwhelming myself and the mods to the point where we just can't keep track of it all, let alone deal with all of it. As much as we would like to be able to we just can't keep track of every thread.

ASF members can help us by reporting ramping when you see it. You will notice this symbol '

' in the top right of every post. Clicking on it enables members to report particular posts.

Any help is very much appreciated.

great Idea joe,
so should we start clicking on every one of chickens posts? :
just kidding..... sort of

cheers

 

[Joe Blow]

I would like to draw everyone's attention to this media release by ASIC last week regarding penalties for those deliberately spreading false or misleading rumours.

08-47 False or misleading rumours

Thursday 6 March 2008


ASIC has been approached by a number of market participants concerned that some individuals are deliberately spreading false or misleading information about listed securities.

There are concerns that this is being done to artificially provoke sales of securities and to reduce their market price.

Conduct of this type can be a criminal offence and ASIC, in conjunction with the Australian Securities Exchange, will be vigilant in monitoring the market to ensure this type of behaviour is detected and prosecuted.

Section 1041E of the Corporations Act states that a person must not make a statement or disseminate information if (relevantly):

* it is false in a material particular or is materially misleading; and
* is likely to induce persons to dispose of or acquire financial products or to have the effect of reducing the price for securities; and
* if the person does not care whether the statement or information is true or false, or knows or ought reasonably to have known it is false or misleading.


If a person spreads a false rumour without properly investigating its truth then the person risks breaching this section. ASIC will investigate the conduct of persons who spread false information or rumours if they cannot substantiate that they did concern themselves as to the truth or falsity of the rumour.

The maximum penalty for an individual breaching s.1041E is five years imprisonment and/or a fine of $220,000.

Section 1041E is part of a suite of provisions in the Corporations Act which prohibit market manipulation (s.1041A), false trading (s.1041B) and market rigging (s.1041C). There is also a provision that prohibits inducing a person to deal in a financial product using false or misleading information (s.1041F).

Financial market participants must not engage in dishonest conduct in relation to a financial product or service (s.1041G) when carrying out a financial services business. Dishonest is defined by reference to the standards of ordinary people.

ASIC believes that these provisions, together with the laws prohibiting trading in securities by persons who have confidential price sensitive information (whether or not the information is sourced from an “insider’) are sufficient to ensure fair market trading practices.

http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/08-47 False or misleading rumours?opendocument

That makes the issue very clear. ASIC are obviously very concerned about the deliberate spreading of false information and I would like to highlight and remind everyone about ASF's policy on the posting of rumours. I originally posted on this topic just over a year ago because of my concerns about the deliberate dissemination of false information and I feel just as strongly about the issue today.

Please do not use ASF as a venue to spread rumours that you may have heard on other forums or chat rooms (or even from someone at the pub or the bloke next door). It is important to me that all content posted on ASF is as accurate as possible and I urge all ASF members to report any posted rumours to myself or one of the moderators using the report a post feature.

If you are posting about speculation that has been published in the print media then please ensure that you clearly refer to the publication it originated from.

Thank you all for your co-operation.

 

[jman2007]

Hi Joe,

Thanks for starting this thread, as I think it is a good idea. I just wanted to draw your attention to two recent posts that Reece55 and myself posted on the MTN thread re our misgivings over the MTN JORC calculation, and gauge your thoughts on the legality or otherwise of this type of post on ASF.

Here is my initial reply to a post by ASF member prs:

You might want to do some background research on MTN yourself, the Geo's I have dealings with in SA claim that MTN originally tried to claim work from previous companies as their own, made ridiculous assumptions in correlating profiles in section that were hundreds of meters apart, and reported EOH mineralisation when in actual fact, the hole continued and ended in barren rock....(edited)

jman

And Reece55 corroborated this information:

Jman
I consult to a leading exploration entity in SA in my capacity as an accountant and the same views re the dodgy assumptions in their supposed JORC were relayed to me too...... The summary I received from the expert Geo's was there was an awful lot creative interpretation to build the resource, because the number of drill results were insufficient to perform the calculation.... They likened it to joining the dots when they were in actual fact very far apart....

Sounds like there are a few sad investors on this board......... Perhaps they are looking at MTN's chart upside down?

Cheers

Joe, both Reece55 and myself are very committed to maintaining the high standards that ASF demands. In certain situations however, if I think that a company's potential is being grossly over-represented, and that there has been blatant ramping then I will post additional information as I see fit, which will often be in direct "contradiction" to the "popular mood" on the thread, although much of this info comes from per comm's and having "eyes on the ground", so to speak.

I think investors should be given a balanced view of a company's prospects, and I would hope that I have helped at least someone come to an intelligent investment decision, and I would certainly not put my professional reputation on the line if I was not happy with the veracity of my posts. Unfortunately with "insider" info, if you like to call it that, it is often not possible to back this up with a published record or source, which can place people in a difficult position when faced with breaches of confidentiality/sensitivity of data etc.

If we're talking about the blacks and whites here, I think this is a somewhat grey area. However, if you would like myself or anyone else to no longer provide "extra" information that is not usually available to the market, then I will happily abide.

Regards
jman

 

[nioka]

Joe, both Reece55 and myself are very committed to maintaining the high standards that ASF demands. In certain situations however, if I think that a company's potential is being grossly over-represented, and that there has been blatant ramping then I will post additional information as I see fit, which will often be in direct "contradiction" to the "popular mood" on the thread, although much of this info comes from per comm's and having "eyes on the ground", so to speak.

I think investors should be given a balanced view of a company's prospects, and I would hope that I have helped at least someone come to an intelligent investment decision, and I would certainly not put my professional reputation on the line if I was not happy with the veracity of my posts. Unfortunately with "insider" info, if you like to call it that, it is often not possible to back this up with a published record or source, which can place people in a difficult position when faced with breaches of confidentiality/sensitivity of data etc.

If we're talking about the blacks and whites here, I think this is a somewhat grey area. However, if you would like myself or anyone else to no longer provide "extra" information that is not usually available to the market, then I will happily abide.

Regards
jman

I have the same problem. I still have contacts from a past life that give me information through casual conversation. I also have a friend in WA who flies in and out of mining camps. There is a lot of casual conversation which he has shared with me. One was regarding LYC , only general knowledge, but it convinced me to invest in them in the early 30c range. I shared this info on ASF.
"Pub talk" from the same place told me to sell MDS ( after originally telling me to buy). I shared this info on ASF.
Where do we draw the line. I can't disclose my source. I'm happy to keep the info to myself but have looked at it as my contribution to the forums.

 

[Smurf1976]

Perhaps the word 'unverified' was a poor choice.

What I mean, is that if people are going to post a rumour on ASF, it has to be attributable to someone and they have to be able to demonstrate that with a link or a reference to a published source.

Personally, I would prefer that people stuck solely to verified information but I understand that is a little unrealistic.

What if the person posting is the source and identifies themselves as such?

For example, XYZ seem to be in trouble. Their plant seems to be on fire. I live nearby, can see it from my driveway, and I heard a big bang 10 minutes ago. Now there's lots of smoke coming out and I can hear quite a few fire and police sirens too. Not sure how serious it is but certainly looks like a problem to me.

The above is a hypothetical example by the way.

 

[doctorj]

Watch this space. We will address the questions raised shortly.

There has been some very good points raised thus far and we want to ensure they're properly considered in conjunctioned with guidance provided by ASIC and the Corps Act before we comment.

If anyone else has additional concerns, feel free to add them.

 

[Kauri]

Watch this space. We will address the questions raised shortly.

There has been some very good points raised thus far and we want to ensure they're properly considered in conjunctioned with guidance provided by ASIC and the Corps Act before we comment.

If anyone else has additional concerns, feel free to add them.

Goldman Sachs has tonight put out a report saying that there is a rumour of an emergency rate cut by the Fed tonight... does this qualify as a reported rumour or a rumoured report???
NB - this Goldmans report comes 8 day"s before the FOMC rate decision and it was 8 days before the Jan 30 meeting, that the FED made a surprise 50bpt cut to US rates.
whatever.. it gave a nice boost to the Dow futures, and by extension the $US.. glad I heard it..
Cheers
...........Kauri

 

[Kimosabi]

I have some clients who are publically listed and I find it fascinating watching the speculation on the Forums compared to what really going on within these companies.

In the interest of not getting my ass kicked, I avoid posting anything about these companies, but it sure is interesting seeing things both sides...

If I could be bothered spreading rumours, I'd do it on HotCopper anyway...

 

[rederob]

Just to be clear on this topic, the Corporations Act does not make mention of "rumour" or "rumours" anywhere.
The illegal conduct under the Act will be, generally, "false" and/or "misleading" and/or "deceptive".
The relevant Division covers "prohibited conduct" in the main and is, frankly, mostly common sense.
Interestingly, a "rumour" that proved to be true would be almost impossible to successfully prosecute.

 

[jman2007]

Watch this space. We will address the questions raised shortly.

There has been some very good points raised thus far and we want to ensure they're properly considered in conjunctioned with guidance provided by ASIC and the Corps Act before we comment.

If anyone else has additional concerns, feel free to add them.

Doctorj and Joe,

Thanks for taking the time to consider everyone's comments, I know we all appreciate the effort and time that you're both putting in, and yes, ethically it does get tricky when the lines start to get blurred.

jman

 

[moneymajix]

Re: Psst... I heard a rumour... AFG... ABS ...

ASIC probes false market rumours

http://www.theaustralian.news.com.au/story/0,25197,23355246-643,00.html

 

[jman2007]

I have the same problem. I still have contacts from a past life that give me information through casual conversation. I also have a friend in WA who flies in and out of mining camps. There is a lot of casual conversation which he has shared with me. One was regarding LYC , only general knowledge, but it convinced me to invest in them in the early 30c range. I shared this info on ASF.
"Pub talk" from the same place told me to sell MDS ( after originally telling me to buy). I shared this info on ASF.
Where do we draw the line. I can't disclose my source. I'm happy to keep the info to myself but have looked at it as my contribution to the forums.

Hi Nioka,

"Where do we draw the line?"

Yes, I feel that is the dilema that Joe and doctorj are grappling with as we speak. In my case, working in the gold sector I would like to be able to look at my posts as a contribution to the forum which perhaps some people have found useful (but then gain maybe not! ), similar to yourself.

I absolutely draw the line with commenting on my own company which has a thread on the forum, which imo would really be going too far.

jman

 

[reece55]

Just to be clear on this topic, the Corporations Act does not make mention of "rumour" or "rumours" anywhere.
The illegal conduct under the Act will be, generally, "false" and/or "misleading" and/or "deceptive".
The relevant Division covers "prohibited conduct" in the main and is, frankly, mostly common sense.
Interestingly, a "rumour" that proved to be true would be almost impossible to successfully prosecute.

Reading through the section in Corps Act, looks like rederob has hit the nail on the head.

It's not rumours they are trying to stamp out. What they are trying to stamp out is distributing misleading or inaccurate information regarding financial products (be that shares or other) that would result in an acquisition, disposal or have the effect of reducing the price of the securities. So, what we are talking about is pushing false information for your own gain (be that financial or otherwise).

It's always a little gray when you are providing comment on Company's you feel strongly about. In the end, it really is the responsibility of each poster to ensure that they are complying with these rules (if not just to cover your own ****)...

In relation to my posts on MTN, to me this was not a post of rumour, but rather a comment on already available public information that had been assessed by people I consider to have valuable insight. I certainly don't advocate spreading rumours that are not out in the market place, even if they are ultimately correct...

So, my view is that insight into already available information should be allowed, but the distribution of non public information about corporation's should be prohibited, even if it ultimately proves to be correct because that in itself consitutes insider trading. Just !

Cheers