What is market manipulation?
Market manipulation is the act of artificially influencing the price or value of a financial asset or security in the market. This can be done through a variety of methods, including spreading false or misleading information, engaging in transactions that create the appearance of high demand, or using high-frequency trading algorithms to artificially move prices. Market manipulation is illegal in most countries, as it can cause harm to investors and undermine the integrity of financial markets. It can also lead to market instability and potentially even financial crises. It is important for regulators to monitor for and combat market manipulation in order to protect the integrity of financial markets and ensure fair and transparent pricing for investors.
Market manipulation is the deliberate attempt to interfere with the free and fair operation of financial markets. It involves creating false or misleading appearances of supply, demand, or price levels to deceive traders and investors. Common forms include spreading false information, wash trading (buying and selling the same asset to inflate volume), and pump-and-dump schemes, where prices are artificially driven up before being sold off. These practices distort market integrity and harm honest participants by causing sudden, unjustified price movements. Regulatory bodies such as the SEC and FCA impose strict penalties for such behaviour. True market transparency and fair pricing depend on preventing manipulation and ensuring that prices reflect genuine market activity and investor sentiment.
Dec 28, 2022 11:12