Types of Market Manipulation
Market manipulation takes a variety of forms, including:
Churning - when a trader places both buy and sell orders at the same price. This increased activity is intended to attract other investors and increase the price.
Painting the Tape - when a group of traders create activity or rumors to drive up the price of a stock (also referred to as "Runs" or "Ramping").
Wash trading - selling and re-purchasing the same security or substantially the same security to generate activity and increase the price.
Bear raiding - attempting to push down the price of a stock by heavy selling or short selling.
Cornering (the market) - purchasing enough of a particular stock, commodity, or other asset to gain control of the supply and be able to set the price for it.
Insider Trading - when insiders with important confidential information about a company take advantage of that knowledge to make a profit or avoid losses by buying or selling stocks.
Market Manipulation Lawsuit Example
J.P. Morgan Chase & HSBC Silver Antitrust Class Action Lawsuit
Girard Gibbs LLP represents investors in a class action lawsuit against J.P. Morgan Chase & Co. and HSBC, alleging that the banks violated antitrust laws by manipulating the prices of silver futures and option contracts. The class action alleges that J.P. Morgan and HSBC manipulated the market by making large, coordinated trades to artificially lower the price of silver. By depressing the price of silver, the class action alleges that these banks made substantial illegal profits while harming investors and restraining competition.
