Stock Discussion Sites - ASIC Regulations

[It's Snake Pliskin]

Different people will construe the statement in different ways, I can only be cautious as there is a real possibility that some may take it as I suggest. This site is not for profit and we don't get any financial benefit out of it so if ASIC clamps down on us we could go down the gurgler very fast as lawyers are expensive, I'm willing to be a bit cautious to be on the correct side of the law. Having said that only a small number of posts actually come up on my radar. I hope you understand.

Richkid,

I understand fully. However, it questions the existence of this forum then.
If I say there are good buying opprtunities today, in your opinion is that giving advice? It is a grey area that no lawyer could stand in court to argue about. Is x worth buying? Again grey area because there is no price given, no future target given or no reason for wanting to buy or no disclosure of one's true financial position. So any answer short of the above would be opinion only to a general question of what might be happening in the market.

If we cannot ask general questions, then there is only a role for the general chat forum as I see it.

Maybe you should get clarification from ASIC as to what constitutes advice and have it posted on the forum. You may have it, and if you do I would like to read it. Because if it's too draconian I'm bailing out.

Regards,
Snake

 

[RichKid]

Richkid,

I understand fully. However, it questions the existence of this forum then.
If I say there are good buying opprtunities today, in your opinion is that giving advice? It is a grey area that no lawyer could stand in court to argue about. Is x worth buying? Again grey area because there is no price given, no future target given or no reason for wanting to buy or no disclosure of one's true financial position. So any answer short of the above would be opinion only to a general question of what might be happening in the market.

If we cannot ask general questions, then there is only a role for the general chat forum as I see it.

Maybe you should get clarification from ASIC as to what constitutes advice and have it posted on the forum. You may have it, and if you do I would like to read it. Because if it's too draconian I'm bailing out.

Regards,
Snake

Snake,
We haven't had any issue with this before, not to the extent you cite. You'll see that only a small number of posts have been brought up by me as being subject to this issue.

Basically the question on ZFX was about whether a particular person should buy a particular stock, that's specific enough for me. Your example is very general. Both are on a continuum but at different ends. If you feel uncomfortable distinguishing between the two that is a matter for you and I'm happy to let you decide where you prefer to post and how. If I'm being too obtuse, in your view, get in touch with Joe and we'll try to come up with clearer guidelines, I'm happy to stand corrected, there is no benefit for me in pretending to be correct if I've over-reacted.

Importantly, these forums do not exist to provide specific buying or selling recommendations.

Maybe an ASIC guideline for web forums may be good, perhaps with examples- I'm glad you raised that point. I'll see if Joe can approach them.

 

[It's Snake Pliskin]

Your example is very general. Both are on a continuum but at different ends. If you feel uncomfortable distinguishing between the two that is a matter for you and I'm happy to let you decide where you prefer to post and how.

Richkid,

I am not trying to sound intelligent or cause a problem, and I am not a uranium scientist, but could you explain that in plain English? I really don't understand it. My examples were intended to be general.

If I'm being too obtuse, in your view, get in touch with Joe and we'll try to come up with clearer guidelines, I'm happy to stand corrected, there is no benefit for me in pretending to be correct if I've over-reacted.

ASIC guidlines would suffice. And you are not being obtuse, just defensive. But that's human nature so I'll forgive you.

Importantly, these forums do not exist to provide specific buying or selling recommendations.

You have my agreeance here. But general opinions on prices etc are allowed. Right? Again it's all in the wording of questions and I feel you have done the right thing in notifying a newcomer as to what is expected, though I didn't see it as advice and that's why I have had my say.

If you could chase that ASIC ruling up it would be most appreciated and beneficial for the forum.

Kind Regards
Snake Pliskin

 

[Joe Blow]

RK and Snake... I am in agreeance with you both that we need further clarification on this issue for the benefit of the forum as a whole.

I will do some research over the weekend and start a thread on the topic early next week that will outline ASIC policy on internet discussion sites, the postion of ASF and the responsibilities of posters and site management.

 

[It's Snake Pliskin]

RK and Snake... I am in agreeance with you both that we need further clarification on this issue for the benefit of the forum as a whole.

I will do some research over the weekend and start a thread on the topic early next week that will outline ASIC policy on internet discussion sites, the postion of ASF and the responsibilities of posters and site management.

Joe,

Thanks.
Snake

 

[michael_selway]

RK and Snake... I am in agreeance with you both that we need further clarification on this issue for the benefit of the forum as a whole.

I will do some research over the weekend and start a thread on the topic early next week that will outline ASIC policy on internet discussion sites, the postion of ASF and the responsibilities of posters and site management.

Hi guys thanks

yes sry, will be much more cautious in what i post

MS

 

[doctorj]

Been digging through the ASIC website and located the attached document that seems to outline their current doctrine when dealing with forums such as ASF. If I were Joe, I would consider placing the suggested warnings as per the document.

The bits that those of us who post on this forum should be concerned with lie in IPS 162.42 (note that an IDS is an Internet Discussion Site)

(a) you are personally responsible for your postings (including any
alterations you make to postings). Therefore, you should not
include any misleading or deceptive information in your postings
and not carry out illegal or unauthorised activities using the IDS.
Information in postings may, where appropriate, be made available
to ASIC. ASIC and people acting on such information may take
action against you;
(b) if you include hyper-links to other sites, you may be seen as
endorsing the material on such sites. It may be advisable for you to
warn people accessing other sites that you do not endorse or take
responsibility for material in the hyper-linked sites;
(c) if you own or have some other interest in a security, or you have
any connection with a securities issuer that you might benefit from,
you must disclose that fact. For example, you may be entitled to
receive direct or indirect commissions, fees or other benefits from
a financial product or service provider; or you may be associated
with a particular securities issuer such as by being an employee or
director of a securities issuer. If so, you must disclose that fact in
your posting; and
(d) if the IDS operator finds or reasonably suspects that you are
making illegal or unauthorised postings, your right to make postings
will be withdrawn.

For me, the key phrase in all this is 'misleading or deceptive conduct'.

Misleading and Deceptive conduct is defined in case law by Weitmann v Katies Ltd (1977) 29 FLR 336 at p 343; (1977) ATPR paragraph 40-041 at p 17,444 where Franki J resorted to the Oxford Dictionary definition (to cause to believe what is false; to mislead as to a matter of fact, to lead into error, to impose upon, delude, take in).

• The use of the words "likely to mislead or deceive" means that it is unnecessary to prove that the conduct actually did mislead or deceive (ASC v Nomura International PLC)
• Error or an erroneous assumption on the part of consumers will not, of itself, prove contravention. In order to show that conduct is misleading or deceptive, it must be shown that it has been the cause of the error or is likely to cause error
• Conduct which merely causes some uncertainty in the mids of relevant members of the public does not infringe
• Contravention may be proved without there being knowledge or intention on the part of the defendant (ie. intent is irrelevant) (Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd

All this begs the question, what exactly can we post? The policy statement is very clear on what it requires Joe to do in order to discharge his responsibility in ensuring people are aware of the conditions in viewing and posting. It seems deliberately ambigious on the poster's obligations. The inclusion of the reference to misleading and deceptive conduct, in my armchair opinion suggests that we could individually held liable for any loss proven to be incurred by something we post that is inaccurate - through typographical error, gaps in understanding, incomplete analysis or simply subjective opinion.

This doesn't seem limited to opinions on buy/sell/hold on specific stocks either. It extends to investment strategies, risk management etc. It's a scary world we live in. Didn't I recently mention in another thread how much I hated the FSRA??! I'd be interested in other's opinions on this.

(The definitions of misleading and deceptive, along with associated notes were taken from 'Australian Business Law', 20th Ed. by P. Latimer as published by CCH Australia Ltd)

 

[krisbarry]

At the end of the day, when you walk into a newsagent and pick up all the share mags each month they sell/advertise/spruke/inform/persuade/promote/ etc etc etc.

So what is the problem with doing the same on boards such as this?


What is ramping?

Who defines ramping?

Why is this ramping and something else is not?

When is ramping justified?

Is down ramping just as bad as ramping?

Is there such a thing a ramping?

Why is it OK for professionals to ramp for a living and get paid for it, plus recieve comissions, but when lay people ramp it is frowned upon?

 

[It's Snake Pliskin]

Been digging through the ASIC website and located the attached document that seems to outline their current doctrine when dealing with forums such as ASF. If I were Joe, I would consider placing the suggested warnings as per the document.

The bits that those of us who post on this forum should be concerned with lie in IPS 162.42 (note that an IDS is an Internet Discussion Site)


For me, the key phrase in all this is 'misleading or deceptive conduct'.

Misleading and Deceptive conduct is defined in case law by Weitmann v Katies Ltd (1977) 29 FLR 336 at p 343; (1977) ATPR paragraph 40-041 at p 17,444 where Franki J resorted to the Oxford Dictionary definition (to cause to believe what is false; to mislead as to a matter of fact, to lead into error, to impose upon, delude, take in).

• The use of the words "likely to mislead or deceive" means that it is unnecessary to prove that the conduct actually did mislead or deceive (ASC v Nomura International PLC)
• Error or an erroneous assumption on the part of consumers will not, of itself, prove contravention. In order to show that conduct is misleading or deceptive, it must be shown that it has been the cause of the error or is likely to cause error
• Conduct which merely causes some uncertainty in the mids of relevant members of the public does not infringe
• Contravention may be proved without there being knowledge or intention on the part of the defendant (ie. intent is irrelevant) (Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd

All this begs the question, what exactly can we post? The policy statement is very clear on what it requires Joe to do in order to discharge his responsibility in ensuring people are aware of the conditions in viewing and posting. It seems deliberately ambigious on the poster's obligations. The inclusion of the reference to misleading and deceptive conduct, in my armchair opinion suggests that we could individually held liable for any loss proven to be incurred by something we post that is inaccurate - through typographical error, gaps in understanding, incomplete analysis or simply subjective opinion.

This doesn't seem limited to opinions on buy/sell/hold on specific stocks either. It extends to investment strategies, risk management etc. It's a scary world we live in. Didn't I recently mention in another thread how much I hated the FSRA??! I'd be interested in other's opinions on this.

(The definitions of misleading and deceptive, along with associated notes were taken from 'Australian Business Law', 20th Ed. by P. Latimer as published by CCH Australia Ltd)

Thanks for the info.

I think I'll need to consider my future on forums. The above content is draconian and I may from hereon consider bailing out and limiting myself to general chat. It is all a problem too complex to deal with in my opinion.

Aussie Stock Forums is not the issue, it's the law that's made it not worthwhile.

Snake.

 

[doctorj]

After reading that, I would suggest that ramping isn't ramping if you can provide factual basis for your opinions and these facts are all correct and there is a logical and correct process by which you started with the facts to arrive at your conclusion.

Who defines ramping?

ASIC and ultimately a court.

I'm not having a shot at anyone or anything. I was just trying to save Joe from some research by getting him started. I agree that its a waste of time and it needs to be the duty of the individual to assess each post on its merits before doing their own substantiative research before coming to their own conclusions. A post should be viewed as someone sharing the results of their research and encouraging others to look into it. It should not, under any circumstance be considered by law as something someone can act on and then hold accountable should loss result. We've all got brains between our ears, the law shouldn't protect the lazy among us that elect not to use theirs.

 

[krisbarry]

Here is an example...late last year VLL was a broker recommendation, and was also promoted in a couple of share mags etc. Good stock to buy, plenty of potential etc etc etc...RAMPING IMO!

But if I was to do the same and ramp it till the cows came home I would be warned, put down, called a ramper and possibly be banned from sites such as this.

So its OK for the professionals to RAMP IT/PLUG IT etc

But all along the share price was sitting at around the $2.40 mark, while the ramping took a hold, in the media.

Then what happens....3 profit down-grades and the share price falls to a really filthy level of 30ish cents.

Ummm am I missing somtheing here?

Can someone please explain why some can ramp and others not?

 

[Smurf1976]

The various Real Estate Institutes are amongst the more blatant professional rampers.

"House prices never go down" until "we've reached the bottom". No matter what the market is doing or is likely to do, they will be sure to tell you that it's booming or about to be. They even claim to be able to foresee what the RBA will be doing in future.

 

[dutchie]

Rich

I think you need to put these comments into a new thread on what you can or can't say on the forum.

I have not investigated any legal or ASIC rulings on what can or can't be said on a forum.

It would appear that the onus is on the poster (and the person running the forum) not to have any content in the post that might be construed, by a person reading it, to be advice.

The problem I see is that no matter what information Joe gets from ASIC et al and whatever the definitions are that specify what can be said and what cannot, it will always be open to (expensive) legal interpretation.

To many people, legal definitions, rulings etc are all mumbo jumbo and leaves them no wiser as to what they can or can't say.

Even if a definition or ruling seems to be black and white to one person it is always possible for another person (in our present legal system) to say the opposite and take the matter to the Courts to decide who is right!

This involves emotional and financial stress to both parties irrespective of the final result.

So what is the bottom line?

The bottom line is that no matter what the definitions or rulings etc that Joe (or anyone else) may state in warnings, rules of conduct, rules of what can and what can't be said etc., they can still be challenged and taken to Court for interpretation.

E.g. I make, what I think, is a valid (legal) comment in a post on a certain stock. Someone interprets this as advice to go and buy the stock. They lose money. They sue me for damages because of what I said. Irrespective of the end result I have to spend time, money and have emotional stress defending myself on what I initially thought was an innocent post.

Pretty scary stuff!

So long as the onus remains on the poster not to say anything that may be misconstrued as advice and not on individuals reading the post not to take it as advice there is always the chance that the poster could be taken to Court.

This happens in other parts of the Law as well (Antidiscrimination Law etc).

 

[Joe Blow]

I have split the preceeding posts off from the ZFX thread. They deal with the issue of what can and cannot be said on stock discussion websites. I think it is a useful discussion to have and everyone should be aware of the ASIC regulations that deal with this area.

I will be starting another thread dealing with this topic in the next few days to clarify things further with regards to posting on ASF.

 

[happytrader]

Hi there Joe

I would like to please ask that you remove any of my posts that contravene Asic law. If indeed I have done so, I humbly apologise. I do not wish to be a target for someone on the make and some loser looking for someone else to blame for their lack of insight and laziness in thought and action. Thankyou all for allowing me the pleasure of your company.

Cheers
Happytrader

 

[tarnor]

if you own or have some other interest in a security, or you have
any connection with a securities issuer that you might benefit from,
you must disclose that fact.

I used to do this alot but felt a bit goofy saying that i held at the end of every post, and then what if your out for a small retrace.. It is a good idea though..

I think a solid disclaimer in your sig is a good way to take the heat off the influence of your posts

I've got no problem with rampers who are overly enthusiastic, "shes about to blow" etc but when they make up false information.. or allude to having some sort of inside knowledge i think its gone to far...

Honestly though comparing asf to some other forums thiers is no comparison, if asic was going to clean up things you would think asf would be one of the last on a long list.. Those guidelines are pretty strict though :/

 

[Joe Blow]

Honestly though comparing asf to some other forums thiers is no comparison, if asic was going to clean up things you would think asf would be one of the last on a long list.. Those guidelines are pretty strict though :/

Thanks for your kind words tarnor.

I have aimed for a high standard and I plan to maintain that standard.

With regards to ASIC regulations of internet discussion sites, I am ensuring that ASF is in full compliance. I think Aussie Stock Forums has turned into a great site and I do not see much evidence of 'deceptive or misleading conduct' here.

 

[Dan_]

Joe,

As a thought is it possible to put a large disclaimer on ASF with something to the following effect (I have no legal background)

The information provided in the following forums are compiled form various sources and as a result are not financial advice, do necessarily represent the views and opinions of the site owner and/or it members, do not endorse, recommend or validate any of the information presented, linked or referred to.

By continuing to view this site you agree to indemnify any of it's owners/members of any legal action that may result due to personal loss obtained by following any of the contained or referenced material.

Always ensure you have parental supervision when viewing ASF, keep the posts pointed away from your face at all times. Do not throw deleted messages into a fire as they may explode, always remember coffee is hot, if you read something you don’t like flush eyes with cold water for 10 mins, caution slippery when wet ....blah blah blah

If something like this is needed you could possibly have a 1 page disclaimer that appears before viewing the forums. Members who chose the "remember me" option will only ever have to click this once where as non members will have to accept it each visit?

Just a thought to help out ASF. You could always advise the kind of costs associated with such a legal statement being done. I'll happily donate a few $ to help out.

Or claim the whose lost as free speech? would this make things easier?

Is it just me or does it all get to hard (liability wise) to do anything lately?

 

[It's Snake Pliskin]

Hi Joe,

This has been an issue that I have been thinking about for some time.

I would like a written assurance from ASF that my posts comply with ASIC regulations, and if they don't I would like them to be removed.

The law is only law when it is convenient for people with power. I have no desire wasting time defending myself because someone has a different opinion to me, more money and an agenda.

Please take your time and if you have any questions please ask.

Regards
Snake

 

[kaveman]

Remember the regtulations came into being because of flagrant ramping on forums, to protect the idiots who take things written as gospel.
I think it comes down to making a firm decision to protect yourself. These days I never talk about specific stocks, never even read them on forums. But then this is also a matter of not having time to bother with the threads.
I follow a simple guide "Talk about how to trade, not what to trade"