Share sales fraud in Australia has jumped sevenfold in the last four years, prompting the country’s watchdog to issue guidance on how all regulated brokerages and trading platforms can reduce such fraud risks for clients.
A Sophisticated Scam Targeting Investors
As the Australian Securities and Investments Commission (ASIC) explained, share sale fraud happens when a person with a fake identity claims to be selling or transferring shares that do not belong to them. This can happen as fraudsters often hijack investors’ brokerage accounts through cyber fraud.
“There are terrible stories out there, where in some cases entire investment portfolios are lost, and millions of dollars are involved,” said ASIC Commissioner Simone Constant. “There is a tremendous emotional and financial impact for investors who fall victim.”
“We’re calling on market intermediaries to step up and protect their customers by strengthening their share sale fraud prevention, detection and response practices.”
This came when the losses to scams in the country jumped to nearly $119 million in the initial months of 2025, despite a drop in the number of reports.
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“Vigilance Is Key”
The Australian regulator has now instructed all regulated entities to be cautious about the possible use of stock images, fakes, and forgeries, and to verify the authenticity of new clients independently during onboarding.
Furthermore, they are required to monitor clients’ trading behaviour and conduct additional due diligence when trading activity is unusual, such as a sudden request for large withdrawals. The regulator also directed Australian Financial Services (AFS) licence holders to be alert when clients request to change or add personal information, including postal or email addresses and bank account details.
The regulator also advised investors and traders to review their portfolios regularly to detect any unauthorised activity.
“Vigilance is key, as share sale fraud is often difficult to detect,” added Constant.
Meanwhile, ASIC is also cracking down on other types of financial scams. Recently, it issued 18 notices against social media “finfluencers” suspected of unlawfully promoting high-risk financial products like contracts for differences (CFDs) and other over-the-counter (OTC) derivatives. None of these so-called finfluencers held an advisory licence to recommend investment products.
This article was written by Arnab Shome at www.financemagnates.com.
