by Abby Higgs, Money Morning Article of the Week
Criminals who engage in stock manipulation are subject to civil and criminal penalties.
But prison time and hefty fines certainly haven’t stopped budding manipulators from trying. Market manipulation is up 37% in the last decade, according to the U.S. Securities and Exchange Commission (SEC).
In fact, nowadays, it’s par for the course. CNBC‘s popular “Mad Money” host Jim Cramer admitted he used to habitually manipulate the market when he ran his hedge fund. In a 2009 interview with TheStreet.com, he called it “a fun and lucrative game” and suggested that all hedge fund managers do it.
Of course, the rise in market manipulation is far from surprising. After all, there’s a reason we compare Wall Street brokers to predatory animals – they are willing to go to any length to profit, even if it harms others less advantaged in the process. Just look at the subprime crisis we’re still suffering from.
What Is Stock Market Manipulation?
Stock market manipulation is the intentional distortion of market prices by brokers or by entire investor enterprises. These manipulators gain profits at the expense of other market participants’ losses. “Manipulation can involve a number of techniques to affect the supply of, or demand for, a stock,” recites the U.S. Securities and Exchange Commission (SEC).
“They include: spreading false or misleading information about a company; improperly limiting the number of publicly available shares; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security.”
These four manipulators expected to break away clean with not just millions, but billions…
Four Infamous Stock Manipulation Cases
Stock Manipulation Case No. 1, Enron: In 1985, after merging two pipeline companies to form Enron Corp., founder Kenneth Lay established the market for selling electricity. He successfully lobbied the U.S. Congress to deregulate the sale of natural gas. Lay also lobbied for, and was granted, government deregulation over his company’s earnings reports.
