London Stock Exchange Clamps Down On Market Abuse Amid AIM Turmoil

The London Stock Exchange has expressed significant concerns to the City regulator regarding potential market abuse by bulletin board users and social media influencers, signalling a move to improve conditions and restore confidence in its junior market. This intervention follows a period of declining flotations and an exodus of listed companies from the Alternative Investment Market as instances of public abuse towards companies and directors deter potential listings.

Exchange officials have identified unacceptable behaviour, particularly directed at companies on AIM, which is discouraging directors and firms from considering public listings. The number of companies on AIM has dropped sharply, from a peak of 1,694 in 2007 to just 625 this year. New admissions have fallen to 17, a substantial decline from the 519 peak in 2005. According to the exchange, this downturn is threatening AIM’s vital role as a bridge between private markets and the main market, providing essential support for growth companies.

The review, part of a wider discussion on shaping the future of AIM, highlighted widespread support for the market but also identified the pressing need for reform to ensure its continued relevance and stability. Lack of access to high quality research on smaller companies has created a vacuum, now being filled by bulletin board users. While many contributors act lawfully, others are accused of targeting firms, directors, and advisers with the aim of manipulating share prices.

To address these issues, the London Stock Exchange has resolved to make detailed referrals of suspected abuse to enforcement agencies, encouraging companies to report concerns so that consistent patterns of misconduct can be established. The exchange has also held discussions with the Financial Conduct Authority, which reiterated that posting information likely to give a false or misleading impression about an issuer—when the individual knew or should have known this would be the case—may constitute a breach of UK market abuse regulations.

Several companies subjected to such abuse, which is often unlikely in private markets, have indicated it is a disincentive to joining AIM. The exchange has stressed that exposing companies and directors to such pressure is unacceptable and undermines confidence in public markets. Market commentators argue that anonymous posting of misleading or abusive commentary damages trust, which is vital as policymakers encourage greater retail investment in equities.

The exchange’s report did not identify specific companies or forums involved. However, the regulator remains clear that knowingly sharing deceptive information about listed firms could constitute a criminal offence, no matter the channel used. As scrutiny intensifies, the London Stock Exchange is determined to foster a more responsible and trustworthy environment for AIM participants.