Global regulators have joined forces to clamp down hard on professionals suspected of using internet chat rooms and bulletin boards to ramp share prices.

The Financial Services Authority, headed by Howard Davies, is making it clear that it is an offence to seek to manipulate share prices. It is working together with the US Securities and Exchange Commission, which has 125 staff tracking internet fraud, and European regulators. This could pave the way for a global regulatory "cyberforce'. The SEC has just thrown the book at Tokyo Joe, who ran an internet newsletter in the US, charging him with allegedly telling investors to buy shares in companies in which he owned shares. The London Stock Exchange, which monitors evidence of manipulation, has been aware of the potential problem for some years. It confirms that it is studying messages posted on the internet, plus share trades and the printed media, to see how it can tackle the problem. The LSE's surveillance department has stepped up its activities following a surge in share prices for several tiny UK companies whose shares trade in a narrow market. They include shares in Blakes Clothing, which leapt from 8p to 118p, Medi@Invest (MIN) (15p to 61p) and Ofex-listed Monticello (9p to 92p), all of which have announced internet plans. There is no suggestion that any of these companies, or their advisers, are involved in manipulation. Companies are more typically innocent victims of false information plants or premature leaks. Amber Rudd, a director of Monticello (formerly Zinc Corporation) says that the high recent volume of turnover in her company suggests that chat rooms cannot be a big factor in share price rises. Nigel Wray says he is baffled by the giddy share price rise at his acquisition vehicle, Knutsford, but has not studied the chat rooms. Blakes, MIN and Monticello have all figured strongly in chat rooms and bulletin boards recently. Private share purchases in a thin market can easily fuel prices in the absence of institutional interest in tiny stocks. The regulators fear that promoters may be lurking behind certain e-mails sent out to all subscribers via chat rooms, or posted on website bulletin boards. They warn that internet-induced profits can produce massive exuberance, as shown by the e-mails below. One chat room user recently e-mailed: "Where did you get that "sore loser' attitude? Guess you haven't been following anyone on the list in the last three months. Has anyone NOT gained from being here?' One investor recently used a chat room to extol the virtues of Medi@Invest: "Become a shareholder in this company. It will make you money any time up to mid-Feb I reckon. Wait for the press to really get hold of it. This is shameless ramping, but for once I actually think MIN is worth it – or is that a contradiction.' MIN's share price started to rise and then, following a newspaper tip, nearly doubled on news of MIN's plan to buy a children's internet service, possibly backed by a Kylie Minogue promotional song. Sweetpea was not keen on Monticello but other e-mailers sang its praises.But there has been far more interest in Hugh Osmond's Blakes internet plans.One e mail read: "RECOVER THOSE LOSSES with THIS. This one is about to move heavily north.' There is no suggestion that any of these e-mails are manipulative. Simon Coop, compliance officer at Conrad Black's Hollinger-backed Interactive Investor International (iii)is set to float, says that chat rooms tend to be self policing: overt pushers usually get hounded out by users. But Coop confirmed that iii is concerned about manipulation, and has banned about twenty would-be rampers from its chat rooms.