Regardless of whether you’re a broker, an institution, an insider, or an investor – market manipulation can be illegal. Market manipulation occurs when someone disseminates information about a company to the public in order to influence the value of the stock in a positive or negative manner. The purpose of this is so the group who shared it can profit.
Market manipulation isn’t necessarily a securities violation. In fact, many groups including the government engage in market manipulation. What separates legal manipulation from illegal manipulation is activities like spoofing and disseminating fake information. As long as the information made available is truthful and accurate, there is nothing wrong with market manipulation. For example, if a group of investors buy stock and then promote/advertise truthful information about the company – there is no violation of market manipulation laws.
Even the government engages in market manipulation, referred to as intervention by the government, by influencing the US dollar and keeping interest rates low. Market manipulation is illegal when an investor or group of investors disseminate untruthful information about the company. It’s illegal when you disseminate incorrect information in an attempt to drive a company’s stock up or down for financial gain. This is a form of securities fraud.
If you are accused of securities fraud, you should immediately speak to our criminal defense law firm. We have experience handling securities fraud cases. We can advise you of your rights, and create a defense strategy to help fight the charges against you.
When a broker, or investor, is able to control a piece of the market – that group/individual can win big, with other investors losing. Stock manipulation usually involves marketers, large firms with capital, and publicly traded securities. Often one of the most common forms of stock manipulation is a brokerage pouring money into a stock, inflating the price, and then increasing demand by spreading misrepresentations and omissions, and then selling all of it’s stock. This is a classic market manipulation tactic known as a pump and dump scheme. This type of manipulation is illegal, and you need a securities attorney to work with you to help vindicate you. One of our clients, was accused of manipulating merchant cash advance rates for an industry.
If you’re accused of market manipulation, contact us for a risk free consultation.
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