In response to a sharp rise in identity theft-related share sale fraud, the Australian Securities and Investments Commission (ASIC) has released updated guidance to help Australian financial services (AFS) licensees better protect their clients and businesses.
A Growing Threat
Share sale fraud occurs when someone impersonates a legitimate investor to sell or transfer shares that don’t belong to them. This type of fraud has severe financial and emotional consequences for victims, who often lose substantial investments—sometimes entire portfolios—without warning.
According to ASIC Commissioner Simone Constant, reports of this type of fraud have increased dramatically. “In the last four years, ASIC analysis has identified a seven-fold increase in the number of share sale fraud reports made by market intermediaries,” she said. “There are terrible stories out there, where in some cases entire investment portfolios are lost, and millions of dollars are involved.”
New Guidance for Market Intermediaries
In light of this growing issue, ASIC has updated Information Sheet 237: Protecting against share sale fraud (INFO 237). The revised document draws on findings from an ASIC-led industry review that examined AFS licensees’ client onboarding, identity verification, and fraud detection processes.
AFS licensees, particularly those dealing in securities, play a crucial role in both preventing and identifying fraudulent activity. ASIC is urging these businesses to take stronger, more proactive measures to safeguard their clients.
“Share sale fraud can happen to anyone, at any time, with unsuspecting investors having their accounts hacked and shares sold or transferred to others,” Constant warned. “Vigilance is key as share sale fraud is often difficult to detect.”
Better Practices for Fraud Prevention
The updated INFO 237 outlines several improved practices for AFS licensees, including:
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Verification of Identity: Being alert to the use of stock images, forged documents, or fake identification during client onboarding, and verifying their authenticity independently.
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Monitoring Unusual Activity: Keeping an eye out for unusual trading patterns, large withdrawal requests, or sudden activity in newly opened accounts, and conducting additional due diligence where appropriate.
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Scrutiny of Personal Information Changes: Performing further checks when clients update personal details such as bank account information or email addresses. This includes confirming, when possible, that new bank accounts are in the client's name.
Advice for Investors
ASIC also urges individual investors to take steps to protect themselves, including:
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Regularly reviewing their share portfolios
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Being alert to suspicious transactions
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Enabling multi-factor authentication
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Using secure passphrases instead of simple passwords
By implementing stronger safeguards and remaining vigilant, both AFS licensees and investors can help reduce the risk of share sale fraud and protect hard-earned investments.
For more information, refer to ASIC’s updated Information Sheet 237.
Join the Conversation at The Regulators 2025
FINSIA is proud to announce the return of The Regulators 2025 — a cornerstone event in our professional calendar, shaping the standards and future direction of financial services across Australia and beyond.
This highly anticipated event brings together Australia’s leading regulators, policymakers, and industry professionals for vital discussions on integrity, innovation, and risk in financial services.
We are pleased to confirm that ASIC Commissioner Simone Constant will be among our keynote speakers. She will further explore ASIC's key focuses such as the share sale fraud, private and public markets and how financial professionals can be at the forefront of protecting market integrity.
Don’t miss this opportunity to hear directly from the leaders steering Australia’s financial regulatory agenda.
