Market manipulation happens when people release information about a company to positively or negatively affect its stock’s value. The information is shared in order to allow the relevant group to realize greater profits. In this article, readers can learn more about the legalities of market manipulation, and they can learn how an investment bank lawyer may help in such cases.
Is It Always Illegal to Manipulate the Market?
Manipulation of the market isn’t always a violation of securities laws. As a matter of fact, many organizations, such as the federal government, manipulate the market. However, the quality of the shared information separates legal activities from illicit ones.
As long as the information is honest and accurate, the activity is generally permissible. For example, investors may decide to buy stock in a growing company at a cheap price. After the purchase, the group can promote the company to additional investors. As long as the promotional efforts are truthful, the group isn’t violating the law.
Once the stock’s price has gone up due to increased investor interest, the group sells its shares at a profit. After the stock’s price peaks, it will naturally decline in value as investor interest wanes. This isn’t only legal, it’s an essential function of a bear or bull market. The government intervenes in the market by affecting the value of the dollar, and by striving to keep interests at a low rate.
When Is It Against the Law to Manipulate the Market?
Manipulation of the market becomes illegal if a group or individual disseminates inaccurate information about a particular company, or if one misrepresents the company in an attempt to raise or lower a stock’s value for their own financial game. Market manipulation in this form is a type of securities fraud.
If One Faces Accusations of Illicit Market Manipulation
If a person is accused of illegally manipulating the stock market, they should immediately visit “domain URL” to speak to an attorney who handles securities and investment fraud cases. The attorney can advise the client of their rights, and they can list possible defenses to the charges. Moreover, a local investment bank lawyer can help a client navigate the complex legal system.
