Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)

Email this Article

Send with mail | ahoo instead.
Required Needs to be a valid email
Required Needs to be a valid email
Four Notorious Cases of Stock Manipulation
http://mney.co/1JUznmk
Required Please enter the correct value.
Twitter

Four Notorious Cases of Stock Manipulation

By Abby Higgs, Staff Writer, Money Morning • July 8, 2015

View Comments

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

market manipulation

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.

With Enron's newfound accounting free reign, executives promptly set to cooking the books.

First, they failed to report losses in order to keep investors interested in what seemed like a profitable company.

Second, the financial officers concealed debts so that they didn't show up in the company's accounts. Lay and CEO Jeff Skilling used accounting loopholes and misappropriated investments to keep billions off the company's records.

stock market manipulation
Protesters hold up an effigy of Enron founder Kenneth Lay during a march against the World Economic Forum Feb. 2, 2002 in New York City.

In 2001, after eight years of witnessing Enron's stock market manipulation, in-house accountant Sherron Watkins blew the whistle.

The Enron scandal ended in one of the biggest bankruptcies in history. Enron stock crashed from $90 per share in mid-2000 to less than $1 by the end of November 2001. Investors lost more than $70 billion.

The scandal eventually led to the enactment of the Sarbanes-Oxley Act to expand the accuracy of financial reporting for public companies and punish those attempting to defraud shareholders. The Texas-based energy-trading giant, once America's seventh-biggest company, declared bankruptcy on Dec. 2, 2001.

Stock Manipulation Case No. 2, "The Cartel": On May 20, 2015, Citibank N.A., JPMorgan Chase & Co. (NYSE: JPM), Barclays Plc. (NYSE: BCS), and Royal Bank of Scotland Group Plc. (NYSE: RBS) (a conglomerate that actually referred to themselves as "the cartel") pled guilty to a felony count of conspiring to violate the Sherman Antitrust Act. Specifically, the banks tried to rig the U.S. dollar-to-euro exchange rate. Another bank involved in the scandal, UBS Group AG (NYSE: UBS), pled guilty to another charge.

According to a May 20 exclusive from Reuters, "The misconduct occurred until 2013, after regulators started punishing banks for rigging the London Interbank Offered Rate (LIBOR), a global benchmark, and banks had pledged to overhaul their corporate culture and bolster compliance."

UBS pled guilty to a one-count charge of wire fraud for manipulating the LIBOR, as well as other benchmark interest rates. The other four banks were fined over $10 billion for failing to attempt to stop traders from manipulating forex rates.

The next notorious case coincided with the height of the Great Recession in 2008...

Join the conversation. Click here to jump to comments…

Login
guest
guest
1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
H. Craig Bradley
H. Craig Bradley
7 years ago

Market Manipulation #5 ?

Citibank increased their Silver Derivative positions since June by a around $50 billion or 10X what they were in May. "Paper" Silver spiked-down about $1.00/ounce Tuesday while the U.S. Mint was running out of Silver Eagle Coins for July. JP Morgan is in there too buying derivatives. Demand for physical silver is exploding but the price went way down. Clearly a suspicious divergence, at least. Probably manipulation.

http://investmentresearchdynamics.com/wp-content/uploads/2015/07/silver-300×213.png

0
Reply
LIVE
Visit Money Morning Live


Latest News

March 29, 2023 • By Chris Johnson

Commercial Real Estate is Feeling the Aftershocks of the Financial Crisis

March 29, 2023 • By Kenny Glick

Here's How You Can Find a New Trade If You Just Missed Your Entry

March 29, 2023 • By Garrett Baldwin

It's Not You... It's the Market
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover This Is VWAP Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Warlock's World Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Flashpoint Trader Darknet Hyper Momentum Trader Alpha Accelerators Weekly Profit Cycles Brutus Alerts

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz