Even if Monk wasn't backdoor selling, the float lockdown effort clearly constitutes conspiracy to manipulate the market. It is illegal as it should be.
Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency. Market manipulation is prohibited in the United States under Section 9(a)(2)[1] of the Securities Exchange Act of 1934, and in Australia under Section s 1041A of the Corporations Act 2001. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradeable security.
Many people don't realize the basic reason behind the securities laws which is this: Capital markets play a critical role in capital formation, which is critical for a prospering economy. When the markets are manipulated or unfair, then people cease to participate in them, firms are unable to raise investment, and the overall economy suffers.
Here's a recent PR from the FBI -
February 14, 2013
Central District of California
(213) 894-2434
LOS ANGELES—Federal authorities have arrested 14 people named in two federal indictments that allege long-term schemes to manipulate stock prices that led to more than 20,000 investors losing over $30 million when artificially inflated stock prices collapsed. As one defendant described his scheme during a wiretapped phone call: “What I do is turn stock into money.”
