The Mechanics of Market Manipulation


in The Mechanics and Regulation of Market Abuse

Published in print September 2005 | ISBN: 9780199244522
Published online January 2010 | e-ISBN: 9780191715105 | DOI:
 The Mechanics of Market Manipulation

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This chapter deals with the economic analysis of market manipulation and explains its mechanics, that is, the most common methods, devices, and techniques used by manipulators to perpetrate their abusive schemes, and the economic results of the various species of market manipulation. The most common definitions of market manipulation are considered to present a new, synthetic, and workable definition of market manipulation. This definition strives to reflect the realities of modern financial markets. It incorporates, in a conceptual mode, the findings of modern finance theory, in order to facilitate the gathering and interpretation of evidence that affirms the perpetration of market manipulation. The chapter also offers a systematic classification of the various forms of market manipulation, making constant reference to the definitions and illustrations of market manipulation contained in the Market Abuse Directive and in sections 397(1), (2) (misleading statements and practices), 397(3) (misleading conduct) and 118 (market abuse) of the UK’s Financial Services and Markets Act 2000.

Keywords: Market Abuse Directive; financial markets; market manipulation; regulation; finance theory; economic analysis

Chapter.  33035 words. 

Subjects: Competition Law

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