The Monetary Authority of Singapore and the regulatory body overseeing the Asian city-state's stock market added their voices to the chorus of watchdogs voicing concerns about retail trading attacks on short-sellers in recent days.

Singapore’s central bank and stock exchange regulator yesterday weighed in on the saga of online traders’ attacks on hedge fund short-sellers, a tale that has seen shares in games retailer GameStop, and cinema chain AMC shoot higher in recent days. Shares of Blackberry, the tech firm, have also skyrocketed. The US Securities and Exchange Commission and the UK's Financial Conduct Authority have also issued statements about the market gyrations.

The Monetary Authority of Singapore and Singapore Exchange Regulation said they advised investors to be “on heightened alert to the risks related to trading in securities incited by online discussion forums and social media chat groups.”

The bodies’ statement came after SGX RegCo warned on 10 December about “pump and dump” activities exploiting Telegram chats and other social media channels.

“MAS and SGX RegCo have noted investor interest in Singapore in recent activities in US markets relating to stocks such as GameStop, AMC Entertainment Holdings, and BlackBerry. Discussions in online websites and platforms suggest the possibilities for similar speculative activities in the Singapore stock market,” they said. 

“The public should be aware that certain individuals may exploit this interest for their own benefit through `pump and dump’ activities that can amount to market misconduct under the Securities and Futures Act,” they said. “These perpetrators may do so by setting up positions in certain securities. They then use social media chat groups to incite investors to buy these securities in a manner similar to how individual investors collectively pushed up certain share prices in the US. As soon as the prices of these securities have risen to specific levels, such perpetrators may then sell the securities which they had accumulated earlier without alerting other investors.”

People using the popular social media platform Reddit and others have posted messages encouraging purchases of silver, for example, in order to squeeze short-sellers of the metal. Silver prices gained sharply on Monday, before easing back. 

“Any conduct that intentionally, knowingly, or recklessly creates a false or misleading appearance regarding the active trading, market or price of securities is prohibited under the SFA. Other prohibited acts include but are not limited to the making or dissemination of false or misleading statements, fraudulent inducement to deal in securities, and the employment of manipulative and deceptive devices. Investors should make sure they refrain from conduct that could infringe the SFA. Firm action will be taken against those who breach the SFA or other laws and regulations,” the Singapore organizations said.

“MAS and SGX RegCo are closely monitoring market activities for signs of false trading or other forms of misconduct. Restrictions may be placed on the trading accounts of those suspected of such misconduct and the relevant securities may be placed under designation or suspension. MAS and SGX RegCo are working closely with SGX member firms to ensure our market remains orderly,” the organisations added.