The Financial Supervisory Commission (FSC) is looking into ways to monitor suspected stock market manipulation on Clubhouse, an audio-centered, invite-only social media platform, commission chairman Thomas Huang (黃天牧) said yesterday.
The emergence of the new social network “may pose a challenge to our regulations,” Huang told a meeting of the Legislative Yuan’s Finance Committee in Taipei.
Chinese Nationalist Party (KMT) Legislator Lee Guei-min (李貴敏) raised doubts over the FSC’s ability to spot suspected scams on Clubhouse.
Photo: CNA
“How can the FSC, the Taiwan Stock Exchange [TWSE] or the Taipei Exchange [TPEX] catch manipulation if no officials at these agencies have been invited to the network?” Lee asked.
Clubhouse bars voice recording without the consent of every speaker in a chat room, which might create a loophole for stock manipulators and make supervision more difficult for the regulator, Lee said.
Huang said that he has never used Clubhouse, but has asked the Securities and Futures Bureau to explore the issue and propose measures against manipulation on the platform.
“The TWSE and the TPEX have utilized software, such as Web crawler tools, to catch suspicious texts related to manipulation on social media. However, they might have to adopt a new approach to catch criminals on the audio-only Clubhouse,” Huang said.
It is okay for investors to discuss stocks online, but it would amount to market manipulation if investors, with an intent to influence share prices, spread rumors or false information, or perform other manipulative acts online, Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) said by telephone yesterday.
“Two things separate ordinary conversation from market manipulation: Whether the Internet user’s comment causes changes in share prices and whether they have an intent to influence share prices,” Tsai said.
Sometimes it is hard to detect stock manipulation only by reading the text messages, Tsai said.
However, when agencies notice abnormal volatility in a stock price, they would trace and find out who made the transactions, and check their Internet comments to determine whether they have intended to inflate or deflate stock prices to make money, Tsai said.
However, the approach does not always work, as people hide their identity online and sometimes it is difficult to hold them accountable, TWSE spokesperson Rebecca Chen (陳麗卿) said by telephone.
The FSC sometimes relies on tip-offs to solve crimes committed on social media platforms with entrance barriers or that encrypt users’ conversations, Tsai said, adding that the bureau has solved some cases thanks to people who have noticed illegal asset management activity in chat groups on the Line messaging app.
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