Stock Discussion Sites – ASIC Regulations

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)

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