Stock Manipulation: SID Bulletin
27 Apr 2019
Market manipulation is the deliberate attempt to interfere with the free and fair operation of the market by creating false or misleading appearances with respect to the price of or market for a stock, commodity, currency or product.
Stock market manipulation is the act of artificially inflating or deflating the price of a stock or otherwise influencing the behaviour of the stock market for personal gain. Manipulation is illegal in most cases, but it can be difficult for regulatorsand other authorities to detect.
Section 198(1) of the Securities and Futures Act provides that a person shall not carry out two or more transactions in securities of a corporation which will have the effect of affecting or maintaining the price of the securities, with intent to induce other persons to subscribe for, purchase or sell securities of the corporation or of a related corporation.
Types of manipulation
There are many ways of manipulating the stock market, limited only by the creativity of the perpetrators.
The box, “Types of Market Manipulations” describes the basics of four major types of stock market manipulation. Other types of manipulations go by labels such as “pools”,“lure and squeeze”, “quote stuffing” and “cornering the market”.