What acts are considered manipulation of security prices?
1. Transactions intended to create active trading:
a. Wash Sale – engaging in transaction in which there is no genuine change in the actual ownership of a security
b. Matched Sale – There is a change of ownership in the securities by entering an order for the purchase/sale of security with the knowledge that a simultaneous order of substantially the same size, time, and price, for the sale or purchase of any such security, has or will be entered by or for the same or different parties.
c. Similar transactions where there is no change of beneficial ownership.
2. Engaging in transactions which induce price to increase or decrease:
a. Marking the close – buying and selling securities at the close of the market to alter the closing price of the security.
b. Painting the tape – engaging in a series of transactions in securities that are reported publicly to give the impression of activity or price movement in a security.
c. Squeezing the float – refers to taking advantage of a shortage of securities in the market by controlling the demand side and exploiting market congestion during such shortages in a way to create artificial prices.
d. Hype and dump – engaging in buying activity at increasingly higher prices and then selling securities in the market at the higher prices.
e. Boiler room operations – the use of high pressure sale tactics to promote purchase and sale of securities
f. Daisy chain – it refers to a series of purchase and sales of the same issue at successively higher prices by the same group of people with the purpose of manipulating prices are drawing unsuspecting investors into the market leaving them defrauded of their money and securities.