MorayMackenzie

RE: "In future, the FSA will be able to seek the imposition of a civil penalty, such as a fine or public censure, on any person who is found by an independent statutory tribunal to have fallen below the standards expected of that person," says Gay Wisbey, FSA Director, Markets and Exchanges.

2 points:

1) this is all share dealing type boring stuff that doesn't really apply to our board.

2) They are expecting to be able to take action against anyone who has "fallen below the standards expected of that person"... This kind of assumes that there are standards set high enough to fall below... (I suppose that's anything that Blowdog has to actively moderate)

Moray

GaryC

It appears Bulletin Boards could be in for a shake-up later this year, the required extra screening and other measures could cause many BBSs to become financially un-viable as well as putting many posters off!

Measures being taken from a 'City' perspective, and being championed by the FSA, but will have wider reaching implications!!


Article from FT Market Watch...

Bulletin hoaxers get the brush off
New measures set to sweep boards clean

LONDON (FTMW) -- The reputation of bulletin boards as an easy target for miscreants to peddle their mischief has been well earned over the years, but the days of anonymous culprits planting false information for their own devices look numbered.
The threats of being unmasked by bulletin board operators and a promised crackdown by the Financial Services Authority (FSA) to stamp out abusive practices such as ramping a company's shares are forcing board abusers on to the back foot.

A marked decline in traffic from the heady days of the technology boom also means that the boards are now safer to tread anyway. Chat rooms now echo to a more sober type of discussion than the excited banter that typified the tech boom early last year.

"Levels are probably 10 to 20 percent down on a year ago," says Andy Yates, director of operations at Digital Look, a company that provides research and collates bulletin board postings.

"A lot of the people that over-hyped stocks have disappeared. You tend to get a core user base now of people that comment regularly and are more insightful," Yates added.

Building communities

The attraction of the bulletin boards is easy to understand.

Not since the coffee houses of the 1700s, which precipitated the formation of the London Stock Exchange, have investors had such a convenient meeting place to swap gossip, ask questions about a stock they may be eyeing or just let off steam about the poor management of a company they hold shares in.

The medium has gained a strong following, not least from city professionals and the companies themselves, following several high profile scoops on the boards.

SmithKline Beecham's merger with Glaxo [UK:GSK], the tie-up between Reckitt & Colman [UK:RB] and Benckiser and the merger between AOL and Time Warner [US:AOL] were all revealed on the boards ahead of the companies' official announcements.

These are the qualities, however, that have made the boards an attractive location for less scrupulous individuals to manipulate a company's share price for their own gain.

Loose talk can cost companies

The self-regulatory nature of the boards has also helped deter undesirables, as users are quick to report anyone falling foul of the rules imposed by the operator.

But there have been plenty of cases that have slipped through the cracks.

One of these was Minmet, the Irish mining company, which saw its shares suffer after a bogus announcement claimed that Mercury Asset Management, the investment fund and one of Minmet's biggest shareholders, had sold shares in the miner.

Claims Direct [UK:CLA], the personal injury law firm, was another corporate victim of bulletin board abuse when a mystery punter used then Chairman Tony Sullman's name to register with a bulletin board and anonymously ramp the firm's shares.

The user adopted the pseudonym "bitter*******s" to post at least three messages last year about Claims Direct, making untruthful and abusive attacks against its critics. One of these postings contained a "strong buy" recommendation for shares in the firm. Sullman, a former cabbie who holds around 29 percent of the company, has since stepped down to become non-executive chairman and denies making any of the postings.

The Department of Trade and Industry is now looking into a complaint from a former franchisee claims manager of the company who was attacked in the postings.

Egg [UK:EGG], the online bank that is 80 percent owned by Prudential [UK:PRU] , recently admitted it had had enough of being beaten up by customers on its bulletin boards.

Following a stream of abuse it has decided to close down its bulletin boards, which were run independently of Egg, and will now control a new service itself.

Board scams

Typically, bulletin board scams have been aimed at ramping a company's share price in order for the hoaxer to sell the stock at artificially inflated levels. One of these is the appropriately named 'pump and dump', which is when a user turns from being the company's number one fan into its biggest critic once the stock has been hyped.

But ramping has now been taken over in popularity by 'deramping' or shorting a stock.

This was used in the Minmet case when a short seller encouraged a decline in the company's share price by propagating false and negative comment about the stock, thus providing the culprit with the opportunity to pick up the stock on the cheap.

Another less sinister category is that of the 'over-hyped stock'. Basically this is a share that has been pushed by a number of people rather than just an individual.

"Bright Station [UK:BSN] is one that springs to mind - right through it's many forms it's one that has been ramped consistently by a lot of investors," says Yates at Digital Look.

"It still has some support on the boards but that has faded dramatically as it has come to pass that the hype wasn't really justified."

Companies fight back

The bulletin board abusers have not had it all their own way though.

Scoot [UK:SCO], the online directory service, took the unusual step of hiring a private detective agency to investigate how confidential information about the company had found its way on to the bulletin boards.

It took legal action and a court order forced bulletin board operator Interactive Investor International (iii) [UK:IIN] to reveal the identities of the people posting the comments. These identities had until that point been protected by the Data Protection Act.

Although the outcome was not made public, it is thought Scoot caught those responsible but decided not to take further action after assurances that it would not happen again.

Totalise [UK:TOT], an AIM-listed Internet service provider, obtained the identity of a user who went under a pseudonym, "Zeddust".

A court ruled that Motley Fool and iii had to disclose Zeddust's identity after the perpetrator posted allegedly defamatory remarks on discussion boards on both sites.

"Bulletin boards have definitely become a much tougher environment," says a senior compliance officer at a major bulletin board operator in the UK.

"The propensity for companies to litigate against defamatory posters or for organisations such as the DTI or the LSE to step in and ask companies to unmask people posting on bulletin boards has significantly changed the climate."

Software snoopers

Inevitably the battle against board abuse is also being fought with technology.

AIM-listed IBNet [UK:IBN] has developed software that allows companies to monitor what is being said about them and their competitors online. The software called Sharedetec aims to combat fraud that includes share price ramping, 'pumping and dumping' shares, reputation abuse and misinformation.

Regulator flexes muscles

The boards have also aroused the interest of the Financial Services Authority, which recently released a report aimed at ending abusive practices.

The new code, which is expected to come into effect before the end of November, aims to create a level playing field for all users of the UK financial markets.

The code has three main categories; misuse of information such as buying or selling shares based on knowledge that has not been made public yet; creating a false or misleading impression, for example posting on an internet bulletin board an inaccurate story about a company to influence its share price; and market distortion.

"In future, the FSA will be able to seek the imposition of a civil penalty, such as a fine or public censure, on any person who is found by an independent statutory tribunal to have fallen below the standards expected of that person," says Gay Wisbey, FSA Director, Markets and Exchanges.

Progress but more needed

Bulletin board experts have welcomed the development but say that the Watchdog needs to do more to stamp out the problems of abuse at the professional level.

"Although they are right to crack down, bulletin boards aren't the major offender," says Yates from Digital Look. "The FSA really needs to get to the root of the problem, but this is a step in the right direction."

GranTurismo

This only relates to boards giving financial advice.

Also there is the ususal intenet free speach vs liable stuff.

Lots of people were ramped, but but they were so daft they deserve it.

PS My Website attracts loads of hits so please invest heavily in me. I am worh about £1.5 Million prehaps, depending on how you calculate it, sort of.

GaryC

You are right, it does relate to 'Financial related' BBSs, BUT the FSA has friends in very high places and a reputation for being 'Bulls in China shops'

The commentary in Tuesday's FT was suggesting that the FSA were going to push for sweeping changes across all BBSs to prevent the leaking of financial information, but that this could have catastrophic consequences for smaller, non-profit making, minimal funded leisure sites

Makes a change for stupid over-reactionary proposed legisalation that DOESN'T come from the EU!!