# Market Manipulation — full definitions Source: https://marketmanipulation.org Licence: CC BY 4.0. Free to quote with attribution. Generated: 2026-09-08T19:02:48.479Z This file contains every technique definition and every glossary definition on the site, in full. Each definition is written to stand on its own when quoted in isolation. --- # Part 1 — Manipulation techniques ## Order-book manipulation Order-book manipulation is any scheme in which the orders and trades themselves are the instrument of deception, with nothing ever said about the underlying asset. ### Banging the close Banging the close is trading heavily during the short window used to calculate a settlement price, in order to move that settlement in favour of a much larger position that references it. URL: https://marketmanipulation.org/techniques/banging-the-close/ Also known as: marking the settlement, trading the window ### Layering Layering is placing multiple orders at several consecutive price levels with no intention of trading them, building an apparent wall of depth that pushes the price toward a genuine order on the other side. URL: https://marketmanipulation.org/techniques/layering/ Also known as: stacking, multi-level spoofing ### Marking the close Marking the close is trading in the final minutes of a session specifically to move the closing price, which is the price that sets portfolio valuations, margin calls, index levels and derivative settlements. URL: https://marketmanipulation.org/techniques/marking-the-close/ Also known as: painting the close, closing price manipulation ### Marking the open Marking the open is trading into a market's opening auction or first minutes to move the official opening price, which is thinner and cheaper to influence than the close but still feeds benchmarks and guarantees. URL: https://marketmanipulation.org/techniques/marking-the-open/ Also known as: opening price manipulation, gunning the open ### Matched orders Matched orders are prearranged trades between parties acting in concert, entered so that they execute against each other at a price agreed away from the market rather than discovered in it. URL: https://marketmanipulation.org/techniques/matched-orders/ Also known as: prearranged trades, cross trades, accommodation trades ### Momentum ignition Momentum ignition is entering a burst of aggressive orders designed to trigger other participants' momentum strategies, creating a price move the initiator then trades against. URL: https://marketmanipulation.org/techniques/momentum-ignition/ Also known as: igniting, triggering ### Painting the tape Painting the tape is executing a series of transactions to create a misleading appearance of activity or of a price trend on the public trade record, in order to draw other participants in. URL: https://marketmanipulation.org/techniques/painting-the-tape/ Also known as: tape painting, drawing the chart ### Price manipulation Price manipulation is trading intended to create an artificial price — one that does not reflect genuine supply and demand — and it is the general charge a regulator brings when the conduct does not fit a more specific named technique. URL: https://marketmanipulation.org/techniques/price-manipulation/ Also known as: attempted manipulation, market manipulation (general), artificial price manipulation ### Quote stuffing Quote stuffing is flooding a trading venue with order messages in order to slow down the processing of market data, so that competing participants act on prices that are already stale. URL: https://marketmanipulation.org/techniques/quote-stuffing/ Also known as: message flooding, feed congestion ### Spoofing Spoofing is placing orders a trader intends to cancel before execution, to create a false impression of supply or demand and move the price toward a smaller genuine order on the other side. URL: https://marketmanipulation.org/techniques/spoofing/ Also known as: non-bona-fide orders, phantom liquidity, flashing ### Wash trading Wash trading is buying and selling the same asset with no change in beneficial ownership and no market risk, so that a trade prints publicly and creates a false impression of activity or price. URL: https://marketmanipulation.org/techniques/wash-trading/ Also known as: wash sales, self-dealing trades, circular trading ## Corners and squeezes Corners and squeezes are schemes that control the supply of an asset so that participants who are obliged to buy — to close a short or make delivery — must do so at prices the controller sets. ### Box squeeze A box squeeze is holding both a long position and the lendable supply of a security, so that recalling the borrow forces short sellers to buy back at a moment and a price the holder chooses. URL: https://marketmanipulation.org/techniques/box-squeeze/ Also known as: borrow squeeze, recall squeeze ### Cornering Cornering is acquiring control of the deliverable supply of an asset while holding a large long derivative position in it, so that short sellers cannot obtain the asset and must settle on the cornerer's terms. URL: https://marketmanipulation.org/techniques/cornering/ Also known as: market corner, corner and squeeze ### Delivery squeeze A delivery squeeze is controlling the certified stocks, warrants or logistics needed to satisfy a futures contract, so that short sellers cannot deliver even where the commodity exists elsewhere. URL: https://marketmanipulation.org/techniques/delivery-squeeze/ Also known as: warehouse squeeze, delivery point squeeze ### Engineered short squeeze An engineered short squeeze is deliberately acquiring the tradable supply of a security and withdrawing it from the lending market, so that short sellers who must cover cannot find stock and are forced to buy at the engineer's price. URL: https://marketmanipulation.org/techniques/engineered-short-squeeze/ Also known as: short corner, manufactured squeeze ### Float locking Float locking is removing shares from the freely tradable supply — through lock-ups, nominee holdings, or coordinated refusal to sell or lend — so that ordinary buying moves the price far more than the company's size would suggest. URL: https://marketmanipulation.org/techniques/float-locking/ Also known as: locking the float, float control ## Information-based manipulation Information-based manipulation moves a price by changing what people believe about an asset, using false or misleading statements, undisclosed paid promotion, or fabricated documents. ### Analyst manipulation Analyst manipulation is publishing research that does not reflect the analyst's genuine view, because the rating serves an investment banking relationship or a trading position rather than the client reading it. URL: https://marketmanipulation.org/techniques/analyst-manipulation/ Also known as: compromised research, tainted research ### Boiler rooms A boiler room is a high-pressure sales operation that sells securities to investors using scripted misrepresentations, converting a block of stock the operator holds into cash one call at a time. URL: https://marketmanipulation.org/techniques/boiler-rooms/ Also known as: bucket shop, chop shop, call centre fraud ### Chat group pumps A chat group pump is a coordinated buying campaign organised inside a messaging group, where organisers accumulate before announcing a target and sell into the buying their announcement produces. URL: https://marketmanipulation.org/techniques/chat-group-pumps/ Also known as: Telegram pumps, Discord pumps, pump groups ### EDGAR filing fraud EDGAR filing fraud is submitting a false document through the SEC's official filing system, exploiting the authority of the system of record to move a share price before the issuer can correct it. URL: https://marketmanipulation.org/techniques/edgar-filing-fraud/ Also known as: false filings, filer hijacking ### Fake press releases A fake press release is a fabricated corporate announcement issued through a wire service or a lookalike site, designed to move a share price for the few minutes before the company can deny it. URL: https://marketmanipulation.org/techniques/fake-press-releases/ Also known as: hoax announcements, spoofed releases ### False rumours Spreading false rumours is seeding an untrue claim about a company into channels traders read, in order to move the price and trade against the reaction before the claim can be checked. URL: https://marketmanipulation.org/techniques/false-rumors/ Also known as: rumourtrage, talking the book ### Newsletter scalping Newsletter scalping is recommending a security publicly while secretly selling it into the demand the recommendation creates, so that subscribers acting on the advice become the publisher's exit. URL: https://marketmanipulation.org/techniques/newsletter-scalping/ Also known as: scalping, front-running your own tip ### Paid stock promotion Paid stock promotion is publicising a security in exchange for compensation, which is lawful only if the fact of payment, the payer and the amount are fully disclosed under Securities Act Section 17(b). URL: https://marketmanipulation.org/techniques/paid-stock-promotion/ Also known as: touting, undisclosed promotion, stock touting ### Pump and dump A pump and dump is a scheme in which shares are accumulated cheaply, promoted with misleading claims to drive the price up, and then sold into the demand the promotion created, leaving later buyers with the loss. URL: https://marketmanipulation.org/techniques/pump-and-dump/ Also known as: ramp and dump, promote and dump ### Short and distort Short and distort is taking a short position and then publishing false or materially misleading negative claims about the issuer, in order to drive the price down and cover cheaply. URL: https://marketmanipulation.org/techniques/short-and-distort/ Also known as: bear raid, negative pump ### Social media ramps A social media ramp is a coordinated posting campaign designed to drive attention and buying into a thinly traded security, so that the organisers can sell into the demand their posts created. URL: https://marketmanipulation.org/techniques/social-media-ramps/ Also known as: coordinated promotion, influencer ramps ## Issuer and structural schemes Issuer and structural schemes manipulate the supply of shares and the corporate vehicle itself — creating shells, hiding control, and issuing stock in ways designed to be sold into a market that has been prepared for it. ### Custodianship shell hijacking Custodianship shell hijacking uses a state-court receivership process to seize control of an abandoned but still-quoted public company, then issues stock in it to the person who obtained the appointment. URL: https://marketmanipulation.org/techniques/custodianship-shell-hijacking/ Also known as: shell hijacking, custodianship abuse ### Dilution death spirals A death spiral is a convertible instrument that converts into stock at a discount to the prevailing market price, so each conversion dilutes holders and pushes the price lower, entitling the holder to still more shares. URL: https://marketmanipulation.org/techniques/dilution-death-spirals/ Also known as: toxic convertibles, floorless convertibles, toxic lending ### Free riding and parking Parking is placing securities in a nominee's name while keeping the real economic interest, in order to disguise ownership, evade position limits or defeat resale restrictions. URL: https://marketmanipulation.org/techniques/free-riding-and-parking/ Also known as: stock parking, warehousing ### Reverse merger schemes A reverse merger scheme uses the lawful mechanism of merging a private business into a public shell to obtain a listing without scrutiny, in order to distribute stock into a market prepared for it. URL: https://marketmanipulation.org/techniques/reverse-merger-schemes/ Also known as: back-door listings, reverse takeovers ### Shell factories A shell factory manufactures public companies with no real business, complete with nominee shareholders and a share quotation, for sale to promoters who need a listed vehicle to distribute stock through. URL: https://marketmanipulation.org/techniques/shell-factories/ Also known as: shell manufacturing, manufactured shells ### Undisclosed control blocks An undisclosed control block is a controlling shareholding held through nominees and offshore entities so that no individual holding crosses a reporting threshold, leaving the market with a false picture of who controls the company. URL: https://marketmanipulation.org/techniques/undisclosed-control-blocks/ Also known as: hidden control, concealed blocks ### Unregistered distributions An unregistered distribution is selling securities to the public without registration or a valid exemption, which Securities Act Section 5 prohibits regardless of whether anyone was deceived or harmed. URL: https://marketmanipulation.org/techniques/unregistered-distributions/ Also known as: Section 5 violations, illegal distributions ## Benchmark and cross-market manipulation Benchmark and cross-market manipulation moves one price in order to profit somewhere else — distorting a reference rate, a settlement window or a cash market to change the value of positions that settle against it. ### Benchmark submission rigging Benchmark submission rigging is skewing the figures a panel member reports into a reference rate calculation, so that the published benchmark moves in favour of positions that settle against it. URL: https://marketmanipulation.org/techniques/benchmark-submission-rigging/ Also known as: rate rigging, benchmark manipulation ### Cash versus derivatives schemes A cash versus derivatives scheme establishes a large derivative position and then trades the smaller underlying market at a deliberate loss, in order to move the reference price the derivative settles against. URL: https://marketmanipulation.org/techniques/cash-vs-derivatives-schemes/ Also known as: cross-market manipulation, marking the underlying ### ETF and NAV abuse ETF and NAV abuse exploits a fund's valuation of illiquid or stale-priced holdings, creating or redeeming shares at a ratio that transfers value from the investors who remain in the fund. URL: https://marketmanipulation.org/techniques/etf-nav-abuse/ Also known as: NAV arbitrage, stale price arbitrage ### FX fixing FX fixing manipulation is trading during the short window used to calculate a daily currency benchmark, using advance knowledge of client orders that must be executed at that fix. URL: https://marketmanipulation.org/techniques/fx-fixing/ Also known as: fix trading, benchmark fixing abuse ### Options expiry pinning Options expiry pinning is trading to hold a share price at or across an option strike at expiry, exploiting the fact that a few cents of movement decides whether large positions pay out or expire worthless. URL: https://marketmanipulation.org/techniques/options-expiry-pinning/ Also known as: pinning the strike, expiry manipulation ### Settlement price manipulation Settlement price manipulation is trading to move an official settlement price, because that price determines margin, portfolio marks and the payoff on contracts many times larger than the trading itself. URL: https://marketmanipulation.org/techniques/settlement-price-manipulation/ Also known as: settlement rigging, marking the settlement ## Crypto-native manipulation Crypto-native manipulation exploits features that exist only in blockchain markets — public pending transactions, automated pricing formulas, protocol-controlled liquidity, and venues that report their own volume. ### Exchange wash trading Exchange wash trading is a trading venue reporting volume that did not genuinely occur, or permitting others to generate it, in order to appear more liquid and rank higher than it is. URL: https://marketmanipulation.org/techniques/exchange-wash-trading/ Also known as: volume inflation, fake volume ### Insider listing trading Insider listing trading is buying a token ahead of an exchange's confidential decision to list it, exploiting the sharp price rise that a major listing announcement reliably produces. URL: https://marketmanipulation.org/techniques/insider-listing-trading/ Also known as: listing front-running, exchange insider trading ### Market maker loan arrangements A market maker loan arrangement lends token inventory to a market maker on terms tied to price or listing outcomes, creating an incentive to generate activity rather than to quote neutrally. URL: https://marketmanipulation.org/techniques/market-maker-loan-arrangements/ Also known as: token loan deals, MM option agreements ### Oracle manipulation Oracle manipulation moves the price source a smart contract reads, usually a shallow liquidity pool, so that a protocol values collateral wrongly and can be drained within a single transaction. URL: https://marketmanipulation.org/techniques/oracle-manipulation/ Also known as: price feed attacks, oracle exploits ### Perpetual market spoofing Perpetual market spoofing is placing orders on a crypto derivatives venue with no intention of trading them, on infrastructure that frequently keeps no order audit trail and may sit outside any regulator's reach. URL: https://marketmanipulation.org/techniques/perp-market-spoofing/ Also known as: perp spoofing, crypto derivatives spoofing ### Rug pulls A rug pull is a crypto scheme in which the operators withdraw the liquidity backing a token, or mint unlimited new supply, leaving holders with an asset that cannot be sold at any price. URL: https://marketmanipulation.org/techniques/rug-pulls/ Also known as: liquidity pull, exit scam ### Sandwich attacks and MEV A sandwich attack places one transaction immediately before a victim's pending swap and another immediately after it, moving the pool price so that the victim trades at a worse rate and the attacker keeps the difference. URL: https://marketmanipulation.org/techniques/sandwich-attacks-mev/ Also known as: MEV extraction, transaction ordering abuse ## Related but distinct Insider trading, churning, front running, Ponzi schemes and naked short selling are frequently called market manipulation and are not, because none of them works by falsifying the price signal. ### Churning Churning is excessive trading in a customer's account driven by the broker's commissions rather than the customer's objectives, which defrauds one identifiable person and leaves the market price untouched. URL: https://marketmanipulation.org/techniques/churning/ Also known as: excessive trading, overtrading ### Front running Front running is trading ahead of a customer order to capture the price improvement that order will produce, which breaches a duty owed to that customer rather than falsifying any public price. URL: https://marketmanipulation.org/techniques/front-running/ Also known as: trading ahead, anticipatory trading ### Insider trading Insider trading is dealing in securities on material non-public information in breach of a duty of trust or confidence, which exploits a true signal others cannot see rather than injecting a false one into the price. URL: https://marketmanipulation.org/techniques/insider-trading/ Also known as: insider dealing ### The naked short selling debate Naked short selling is selling short without having borrowed the security or arranged to borrow it, which is restricted by Regulation SHO and whose real-world scale and price impact remain genuinely contested. URL: https://marketmanipulation.org/techniques/naked-short-selling-debate/ Also known as: naked shorting, failure to deliver debate ### Ponzi schemes A Ponzi scheme pays returns to earlier investors from later investors' money rather than from genuine profits, which is investment fraud with no market involvement and no price to manipulate. URL: https://marketmanipulation.org/techniques/ponzi-schemes/ Also known as: pyramid schemes, affinity fraud --- # Part 2 — Glossary ### Order book The order book is the live list of all outstanding buy and sell orders for an instrument, arranged by price, that a trading venue displays to participants. It is the primary public signal of where supply and demand sit at any moment, which is precisely why placing insincere orders in it is a manipulation technique. URL: https://marketmanipulation.org/glossary/order-book/ ### Bid A bid is an order to buy a stated quantity at a stated price or better. The highest bid in the book is the best bid, and it is one half of the quoted spread. URL: https://marketmanipulation.org/glossary/bid/ ### Ask An ask, also called an offer, is an order to sell a stated quantity at a stated price or better. The lowest ask is the best offer. URL: https://marketmanipulation.org/glossary/ask/ ### Bid-ask spread The bid-ask spread is the difference between the best bid and the best ask. It is the immediate cost of trading in and straight back out, and it widens when market makers judge the risk of being adversely selected to have risen. URL: https://marketmanipulation.org/glossary/bid-ask-spread/ ### Touch The touch is the best bid and best ask taken together — the top of the order book. An order placed 'at the touch' is at the current best price on its side. URL: https://marketmanipulation.org/glossary/touch/ ### Depth Depth is the total quantity available at each price level in the order book. Deep books absorb large orders with little price movement; thin books do not. Manufactured depth is the mechanism of spoofing and layering. URL: https://marketmanipulation.org/glossary/depth/ ### Liquidity Liquidity is the ability to trade a meaningful size quickly without moving the price much. It is not a single number: it combines the spread, the depth at each price, and how fast the book replenishes after a trade. URL: https://marketmanipulation.org/glossary/liquidity/ ### Phantom liquidity Phantom liquidity is displayed depth that disappears the moment anyone tries to trade against it. Some of it is innocent — market makers cancelling as prices move — and some of it is spoofing. The two are distinguished by intent at the moment of placement, not by the cancellation itself. URL: https://marketmanipulation.org/glossary/phantom-liquidity/ ### Bona fide order A bona fide order is one placed with a genuine intention to trade if the market reaches it. The concept does most of the work in spoofing law: an order placed with the intention to cancel it before execution is not bona fide, and is therefore not a real offer at all. URL: https://marketmanipulation.org/glossary/bona-fide-order/ ### Limit order A limit order is an instruction to trade only at a specified price or better. It rests in the order book until it is filled, cancelled or expires, and while resting it is visible to other participants. URL: https://marketmanipulation.org/glossary/limit-order/ ### Market order A market order is an instruction to trade immediately at whatever prices are available, consuming resting liquidity until it is filled. It guarantees execution, not price. URL: https://marketmanipulation.org/glossary/market-order/ ### Resting order A resting order is a limit order sitting unexecuted in the order book, visible to other participants and available to be traded against. URL: https://marketmanipulation.org/glossary/resting-order/ ### Order-to-trade ratio The order-to-trade ratio is the number of order messages a participant sends for each contract or share actually executed. High ratios are normal for market makers, so the metric is a surveillance filter rather than evidence of wrongdoing on its own. URL: https://marketmanipulation.org/glossary/order-to-trade-ratio/ ### Cancellation rate The cancellation rate is the share of a participant's orders that are cancelled rather than executed. In modern electronic markets the majority of all orders are cancelled, which is why the rate matters only in combination with timing and size asymmetry. URL: https://marketmanipulation.org/glossary/cancellation-rate/ ### Order lifetime Order lifetime is the elapsed time between an order being placed and being cancelled or filled. Genuine order flow produces a long-tailed distribution of lifetimes; a spoofing strategy produces a sharp spike in the first few hundred milliseconds and almost nothing after. URL: https://marketmanipulation.org/glossary/order-lifetime/ ### Book imbalance Book imbalance is the ratio of resting buy quantity to resting sell quantity, usually measured over the top few price levels. Many automated strategies key off it directly, which is what makes a manufactured imbalance profitable. URL: https://marketmanipulation.org/glossary/book-imbalance/ ### Market impact Market impact is the price movement caused by one's own trading. Managing it is the central problem of institutional execution, and manufacturing it in the opposite direction is the point of momentum ignition. URL: https://marketmanipulation.org/glossary/market-impact/ ### Slippage Slippage is the difference between the price expected when an order was sent and the price actually achieved. Persistent slippage against apparently available liquidity is one of the few red flags for spoofing that an ordinary trading desk can observe. URL: https://marketmanipulation.org/glossary/slippage/ ### Adverse selection Adverse selection is the risk that the counterparty who trades against your resting order knows something you do not. Market makers widen spreads to compensate for it, which is why manufactured signals about direction impose a real cost on them. URL: https://marketmanipulation.org/glossary/adverse-selection/ ### Market maker A market maker quotes both a bid and an ask continuously, earning the spread in exchange for supplying immediacy. Market making involves constant order placement and cancellation, which is why high cancellation rates alone prove nothing about manipulation. URL: https://marketmanipulation.org/glossary/market-maker/ ### High-frequency trading High-frequency trading is automated trading characterised by very short holding periods, high message rates and co-located infrastructure. It is a capability, not a strategy, and it is lawful. Most high-frequency activity is market making, arbitrage or execution. URL: https://marketmanipulation.org/glossary/high-frequency-trading/ ### Co-location Co-location is renting rack space in or next to an exchange's data centre so that the physical distance to the matching engine is as short as possible. It is sold openly by exchanges and is not itself a form of manipulation. URL: https://marketmanipulation.org/glossary/co-location/ ### Latency arbitrage Latency arbitrage is profiting from being able to act on a price change before slower participants can update their own quotes. It is contested as a matter of market design and fairness, but it is not manipulation: nothing false is communicated. URL: https://marketmanipulation.org/glossary/latency-arbitrage/ ### Matching engine The matching engine is the exchange system that pairs incoming orders with resting orders according to published priority rules, usually price first and then time. URL: https://marketmanipulation.org/glossary/matching-engine/ ### Price-time priority Price-time priority is the standard matching rule: better prices execute first, and among equal prices the order that arrived first executes first. It is why placement timing has economic value. URL: https://marketmanipulation.org/glossary/price-time-priority/ ### Queue position Queue position is where an order sits in the line at its price level under time priority. A good queue position is valuable, which gives traders a legitimate reason to place orders early and cancel them later. URL: https://marketmanipulation.org/glossary/queue-position/ ### Tick size Tick size is the smallest permitted price increment for an instrument. It sets the minimum profit available from moving the price by one increment, which is the unit of profit in most order-book manipulation. URL: https://marketmanipulation.org/glossary/tick-size/ ### Order audit trail An order audit trail is the complete, timestamped, attributed record of every order message sent to a venue. It is the evidentiary foundation of every spoofing and layering case, because it lets investigators reconstruct exactly what a trader saw and did. URL: https://marketmanipulation.org/glossary/order-audit-trail/ ### Consolidated Audit Trail The Consolidated Audit Trail is the US system that collects order and trade data across all national securities exchanges and FINRA members into a single repository, so that activity spanning several venues can be reconstructed as one sequence. URL: https://marketmanipulation.org/glossary/consolidated-audit-trail/ ### Cross-market surveillance Cross-market surveillance joins data from several venues or several instruments to detect schemes that are invisible in any one of them, such as moving a futures price to profit in the related cash market. URL: https://marketmanipulation.org/glossary/cross-market-surveillance/ ### Surveillance Surveillance, in a market context, is the automated monitoring of order and trade data for patterns that suggest abuse. Exchanges, self-regulatory organisations and regulators each run their own, and most enforcement actions begin with an exchange alert. URL: https://marketmanipulation.org/glossary/surveillance/ ### Market microstructure Market microstructure is the study of how the specific rules and mechanics of a trading venue — its matching rules, tick size, fee schedule and data feeds — shape prices and behaviour. Manipulation techniques are, almost by definition, microstructure exploits. URL: https://marketmanipulation.org/glossary/market-microstructure/ ### Dark pool A dark pool is a trading venue that does not display its order book before trades occur, publishing only executions after the fact. Non-display reduces market impact for large orders; it also removes the displayed book that order-book manipulation depends on. URL: https://marketmanipulation.org/glossary/dark-pool/ ### Lit market A lit market is a venue that publishes its order book before execution. The term exists to distinguish ordinary exchanges from dark pools. URL: https://marketmanipulation.org/glossary/lit-market/ ### Iceberg order An iceberg order displays only part of its total size, replenishing the visible portion as it fills. It is an explicitly permitted venue feature for concealing size, which is a useful contrast with spoofing: hiding real interest is allowed, displaying fake interest is not. URL: https://marketmanipulation.org/glossary/iceberg-order/ ### Fill A fill is an execution against an order, in whole or in part. The relationship between fills on one side of the book and cancellations on the other is the central statistic in spoofing detection. URL: https://marketmanipulation.org/glossary/fill/ ### Market manipulation Market manipulation is conduct that interferes with the honest formation of a price — through fake orders, coordinated trades, false statements or control of supply — in order to profit from the distortion it creates. US law addresses it through the Securities Exchange Act, the Commodity Exchange Act and the federal fraud statutes. URL: https://marketmanipulation.org/glossary/market-manipulation/ ### Scienter Scienter is the mental state of intending to deceive, manipulate or defraud. It is a required element of a Rule 10b-5 claim, and it is what separates an aggressive trading strategy from a manipulative one on identical order data. URL: https://marketmanipulation.org/glossary/scienter/ ### Intent Intent, in manipulation cases, means the purpose behind an order or statement rather than its effect. The anti-spoofing statute turns entirely on intent at the moment of placement, which is why these cases are proved by patterns and communications rather than by price data alone. URL: https://marketmanipulation.org/glossary/intent/ ### Recklessness Recklessness is an extreme departure from ordinary care that presents a danger of misleading others which the actor knew of or must have been aware of. Most US courts accept it as sufficient to establish scienter under Rule 10b-5. URL: https://marketmanipulation.org/glossary/recklessness/ ### Rule 10b-5 Rule 10b-5 is the SEC's general antifraud rule, adopted under Exchange Act section 10(b). It prohibits any device, scheme or artifice to defraud, any untrue statement of material fact, and any act or practice that operates as a fraud in connection with the purchase or sale of a security. URL: https://marketmanipulation.org/glossary/rule-10b-5/ ### Section 10(b) Section 10(b) of the Securities Exchange Act of 1934 is the statutory hook for the SEC's antifraud rules. It prohibits the use of manipulative or deceptive devices in connection with the purchase or sale of any security, in contravention of rules the Commission prescribes. URL: https://marketmanipulation.org/glossary/section-10b/ ### Section 9(a)(2) Section 9(a)(2) of the Securities Exchange Act prohibits effecting transactions that create actual or apparent active trading in a security, or that raise or depress its price, for the purpose of inducing others to buy or sell. It is the most direct anti-manipulation provision in US securities law. URL: https://marketmanipulation.org/glossary/section-9a2/ ### Section 17(a) Section 17(a) of the Securities Act of 1933 prohibits fraud in the offer or sale of securities. Unlike Rule 10b-5 it reaches offers as well as sales, and two of its three subsections do not require proof of scienter. URL: https://marketmanipulation.org/glossary/section-17a/ ### Section 17(b) Section 17(b) of the Securities Act — the anti-touting provision — makes it unlawful to publicise a security for compensation without fully disclosing who paid, and how much. It is the statute behind most paid stock promotion cases. URL: https://marketmanipulation.org/glossary/section-17b/ ### CEA section 6(c)(1) Section 6(c)(1) of the Commodity Exchange Act gives the CFTC authority over manipulative or deceptive devices in connection with any swap or contract for sale of a commodity. Rule 180.1 is made under it and is modelled closely on Rule 10b-5. URL: https://marketmanipulation.org/glossary/cea-6c1/ ### CFTC Rule 180.1 CFTC Rule 180.1 prohibits manipulative and deceptive devices in commodity and swap markets. Because it mirrors Rule 10b-5, courts interpreting it draw heavily on securities case law. URL: https://marketmanipulation.org/glossary/cftc-rule-180-1/ ### CEA section 4c(a)(5)(C) Section 4c(a)(5)(C) of the Commodity Exchange Act is the express anti-spoofing provision added by the Dodd-Frank Act in 2010. It prohibits bidding or offering with the intent to cancel before execution, and requires no proof that the price moved or that anyone lost money. URL: https://marketmanipulation.org/glossary/cea-4c-a-5-c/ ### 18 U.S.C. § 1348 Section 1348 of Title 18 is the criminal securities and commodities fraud statute, enacted by the Sarbanes-Oxley Act. It carries a maximum term of 25 years and is the usual criminal charge in spoofing prosecutions. URL: https://marketmanipulation.org/glossary/commodities-and-securities-fraud-statute/ ### Wire fraud Wire fraud is the federal offence of using interstate wires to further a scheme to defraud. Prosecutors add it to market manipulation cases readily, because electronic trading is by definition conducted over wires. URL: https://marketmanipulation.org/glossary/wire-fraud/ ### Criminal parallel A criminal parallel is a prosecution running alongside a civil regulatory action arising from the same conduct. The two resolve on different standards of proof, so a civil settlement and a criminal acquittal on the same facts are not contradictory. URL: https://marketmanipulation.org/glossary/criminal-parallel/ ### Burden of proof Civil enforcement actions are decided on the preponderance of the evidence; criminal prosecutions require proof beyond a reasonable doubt. This is why the same conduct can produce a civil judgment and a criminal acquittal. URL: https://marketmanipulation.org/glossary/burden-of-proof/ ### Allegation An allegation is an assertion that a regulator or prosecutor intends to prove but has not yet proved. Every filed action on this site is described as allegation until a court or tribunal has resolved it, and pages update when it does. URL: https://marketmanipulation.org/glossary/allegation/ ### Consent judgment A consent judgment resolves an action by agreement, entered as a court order. Most SEC settlements are entered without the defendant admitting or denying the allegations, which means a settlement is not a finding of fact. URL: https://marketmanipulation.org/glossary/consent-judgment/ ### Neither admit nor deny Neither admit nor deny is the standard settlement posture in SEC and CFTC matters: the defendant accepts the relief without conceding the facts. It matters for how a settled case should be described — it establishes an outcome, not a finding. URL: https://marketmanipulation.org/glossary/neither-admit-nor-deny/ ### Disgorgement Disgorgement is an order to give up gains obtained from unlawful conduct. It is remedial rather than punitive, which is why it is tracked separately from civil penalties: adding the two together and calling the result a fine double-counts the harm. URL: https://marketmanipulation.org/glossary/disgorgement/ ### Civil monetary penalty A civil monetary penalty is a punitive fine imposed by a regulator or court, distinct from disgorgement of gains. Statutory tiers cap the amount per violation, so large aggregate penalties usually reflect many counted violations. URL: https://marketmanipulation.org/glossary/civil-monetary-penalty/ ### Prejudgment interest Prejudgment interest is the time value of disgorged gains between the conduct and the judgment. It is a component of monetary relief and is recorded separately in this library's case data. URL: https://marketmanipulation.org/glossary/prejudgment-interest/ ### Penalty tiers US securities and commodities statutes set maximum penalties in tiers keyed to the seriousness of the violation and whether it caused substantial losses. The tiers are inflation-adjusted periodically, so comparing penalty sizes across decades needs care. URL: https://marketmanipulation.org/glossary/penalty-tiers/ ### Officer-and-director bar An officer-and-director bar prohibits a person from serving as an officer or director of a public company, either permanently or for a stated period. It is often the most commercially significant part of a judgment. URL: https://marketmanipulation.org/glossary/officer-and-director-bar/ ### Penny stock bar A penny stock bar prohibits a person from participating in any offering of a penny stock. It is common in promotion and shell-company cases, because that is where the recidivism risk sits. URL: https://marketmanipulation.org/glossary/penny-stock-bar/ ### Industry bar An industry bar prohibits association with a broker-dealer, investment adviser or other regulated firm. It is imposed administratively and is effectively a career-ending sanction for a registered person. URL: https://marketmanipulation.org/glossary/industry-bar/ ### Trading suspension A trading suspension under Exchange Act section 12(k) halts trading in a security for up to ten business days when public information about it is questionable. It is not an enforcement action and alleges no wrongdoing by anyone. URL: https://marketmanipulation.org/glossary/trading-suspension/ ### Section 12(k) Section 12(k) of the Securities Exchange Act gives the SEC power to suspend trading in a security summarily when it is in the public interest. It is a protective measure, not a finding. URL: https://marketmanipulation.org/glossary/section-12k/ ### Administrative proceeding An administrative proceeding is an enforcement action brought before an agency's own tribunal rather than a federal court. Procedures, discovery and available remedies differ from district court litigation. URL: https://marketmanipulation.org/glossary/administrative-proceeding/ ### Litigation release A litigation release is the SEC's published notice of an action filed or resolved in federal court. Releases are numbered sequentially and are the primary source for most records in this library. URL: https://marketmanipulation.org/glossary/litigation-release/ ### Artificial price An artificial price is one that does not reflect the genuine forces of supply and demand. Proving artificiality is a required element of a classic price manipulation claim under the Commodity Exchange Act, and it is frequently the hardest element to establish. URL: https://marketmanipulation.org/glossary/artificial-price/ ### Price discovery Price discovery is the process by which trading aggregates dispersed information into a price. Manipulation is harmful precisely because it injects false information into that process, and the damage is borne by everyone who relies on the resulting price. URL: https://marketmanipulation.org/glossary/price-discovery/ ### Materiality Information is material if a reasonable investor would consider it important in deciding whether to buy or sell. Materiality is an element of misstatement claims, and it is judged from the perspective of the reasonable investor rather than the actual audience. URL: https://marketmanipulation.org/glossary/materiality/ ### Misstatement A misstatement is an untrue statement of material fact, or an omission that makes what was said misleading. Half-truths are actionable: the duty is not merely to avoid lying but to avoid creating a false impression. URL: https://marketmanipulation.org/glossary/misstatement/ ### Securities fraud Securities fraud is deception in connection with the purchase or sale of a security. Market manipulation is one species of it; insider trading is another; ordinary lying in a prospectus is a third. URL: https://marketmanipulation.org/glossary/securities-fraud/ ### Dodd-Frank Act The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 restructured US financial regulation after the 2008 crisis. For this site its most important provisions are the express anti-spoofing prohibition and the CFTC's broadened anti-manipulation authority. URL: https://marketmanipulation.org/glossary/dodd-frank-act/ ### Self-regulatory organisation A self-regulatory organisation is an industry body with delegated authority to write and enforce rules for its members, subject to regulatory oversight. FINRA and the US exchanges are the main examples, and they usually detect manipulation before the government does. URL: https://marketmanipulation.org/glossary/self-regulatory-organisation/ ### FINRA FINRA is the self-regulatory organisation for US broker-dealers. It runs cross-venue equity surveillance, brings its own disciplinary actions, and refers matters to the SEC. URL: https://marketmanipulation.org/glossary/finra/ ### Statute of limitations A statute of limitations sets the period within which an action must be brought. Limitation periods explain part of the long and variable lag between manipulative conduct and the enforcement action that follows it. URL: https://marketmanipulation.org/glossary/statute-of-limitations/ ### Tolling agreement A tolling agreement pauses the running of a limitation period by consent, usually while an investigation continues. They are common in complex market cases and are one reason charges can appear years after the conduct. URL: https://marketmanipulation.org/glossary/tolling-agreement/ ### Spoofing Spoofing is placing orders with the intention of cancelling them before execution, so that other participants misread the order book and move the price toward a smaller genuine order on the other side. URL: https://marketmanipulation.org/glossary/spoofing-term/ ### Layering Layering is spoofing spread across several consecutive price levels, building an apparent wall of depth rather than a single outsized order. URL: https://marketmanipulation.org/glossary/layering-term/ ### Wash trade A wash trade is a transaction in which the same beneficial owner is on both sides, so no ownership changes hands and no market risk is taken, yet a trade prints publicly as if it were genuine. URL: https://marketmanipulation.org/glossary/wash-trade/ ### Matched order A matched order is a prearranged trade between two parties acting in concert, entered so that they execute against each other at a chosen price. Unlike a wash trade the owners differ, but the price is agreed rather than discovered. URL: https://marketmanipulation.org/glossary/matched-order/ ### Prearranged trade A prearranged trade is one whose terms are agreed away from the market and then entered on-venue to give it the appearance of competitive execution. Most venues prohibit it outright outside defined block-trade procedures. URL: https://marketmanipulation.org/glossary/prearranged-trade/ ### Painting the tape Painting the tape is executing a series of transactions to create the appearance of activity or a particular price trend on the public trade record, in order to draw others in. URL: https://marketmanipulation.org/glossary/painting-the-tape-term/ ### Marking the close Marking the close is trading in the final minutes of a session specifically to influence the closing price, which is the price that sets portfolio marks, margin calls, index levels and derivative settlements. URL: https://marketmanipulation.org/glossary/marking-the-close-term/ ### Banging the close Banging the close is trading heavily during the window used to calculate a settlement price, in order to move that settlement in favour of a position that references it. The term is used mainly in commodity and derivatives markets. URL: https://marketmanipulation.org/glossary/banging-the-close-term/ ### Momentum ignition Momentum ignition is entering aggressive orders designed to trigger other participants' momentum strategies, creating a price move the initiator can then trade against. URL: https://marketmanipulation.org/glossary/momentum-ignition-term/ ### Quote stuffing Quote stuffing is flooding a venue with order messages in order to slow the processing of market data for other participants. Its target is the infrastructure rather than the inference other traders draw. URL: https://marketmanipulation.org/glossary/quote-stuffing-term/ ### Corner A corner is control of enough of the deliverable supply of an asset, together with a long derivative position in it, that short sellers cannot obtain the asset to deliver and must settle on the cornerer's terms. URL: https://marketmanipulation.org/glossary/corner/ ### Squeeze A squeeze is any situation in which participants who must buy — to close a short, to make delivery, or to meet a margin call — face a supply that cannot accommodate them, so the price rises steeply. Squeezes occur naturally as well as by design. URL: https://marketmanipulation.org/glossary/squeeze/ ### Short squeeze A short squeeze is a sharp price rise driven by short sellers buying to close positions, which pushes the price higher and forces further closing. A naturally occurring squeeze is not manipulation; engineering one deliberately can be. URL: https://marketmanipulation.org/glossary/short-squeeze/ ### Deliverable supply Deliverable supply is the quantity of a commodity that meets a futures contract's grade, location and timing requirements and can actually be delivered against it. It is usually far smaller than total world supply, which is what makes corners feasible. URL: https://marketmanipulation.org/glossary/deliverable-supply/ ### Delivery month The delivery month is the period in which a futures contract requires physical delivery or final settlement. Manipulation risk concentrates here, because positions must be closed or delivered against a fixed supply. URL: https://marketmanipulation.org/glossary/delivery-month/ ### Float The float is the number of shares actually available to trade, excluding restricted and closely held stock. A small float makes a price easy to move, which is why promotion schemes concentrate on small-float issuers. URL: https://marketmanipulation.org/glossary/float/ ### Pump and dump A pump and dump is a scheme in which shares are accumulated cheaply, promoted with misleading enthusiasm to drive the price up, and then sold into the demand the promotion created, leaving later buyers with the losses. URL: https://marketmanipulation.org/glossary/pump-and-dump-term/ ### Short and distort Short and distort is the mirror image of a pump and dump: taking a short position and then spreading false or misleading negative claims to drive the price down. Honest negative research is not short and distort, and the distinction is the truth of the claims. URL: https://marketmanipulation.org/glossary/short-and-distort-term/ ### Touting Touting is publicising a security in exchange for compensation. It is lawful if the payment is fully disclosed and unlawful under Section 17(b) if it is not. URL: https://marketmanipulation.org/glossary/touting/ ### Stock promoter A stock promoter is someone paid to generate investor interest in a security. The role is legal; concealing the payment, or promoting stock the promoter is simultaneously selling, is not. URL: https://marketmanipulation.org/glossary/stock-promoter/ ### Boiler room A boiler room is a high-pressure sales operation, historically telephone-based, that sells securities using scripted misrepresentations. Modern equivalents run through messaging apps and social platforms. URL: https://marketmanipulation.org/glossary/boiler-room/ ### Cold calling Cold calling is unsolicited contact with prospective investors. It is regulated rather than prohibited, and it is the traditional delivery mechanism for boiler-room fraud. URL: https://marketmanipulation.org/glossary/cold-calling/ ### Scalping Scalping, in the promotion sense, is recommending a security publicly while secretly selling it into the demand the recommendation creates. The undisclosed conflict is the fraud. URL: https://marketmanipulation.org/glossary/scalping-term/ ### Newsletter An investment newsletter publishes securities recommendations to subscribers. Newsletters are lawful and often exempt from adviser registration, which historically made them an attractive vehicle for undisclosed paid promotion. URL: https://marketmanipulation.org/glossary/newsletter/ ### Shell company A shell company is a corporate entity with no meaningful operations or assets. Shells are lawful and have legitimate uses, but a public shell with a share listing is also the raw material for reverse-merger and promotion schemes. URL: https://marketmanipulation.org/glossary/shell-company/ ### Reverse merger A reverse merger takes a private business public by merging it into an existing public shell, avoiding the disclosure and scrutiny of a registered offering. The structure is legal; its use to distribute unregistered stock is not. URL: https://marketmanipulation.org/glossary/reverse-merger/ ### Custodianship Custodianship is a state-court process for appointing someone to revive an abandoned corporation. It has been abused to seize dormant public shells and issue stock in them, which is why the SEC scrutinises custodianship-derived listings closely. URL: https://marketmanipulation.org/glossary/custodianship/ ### Restricted securities Restricted securities are shares acquired in an unregistered transaction that cannot be freely resold until a holding period and other conditions are met. Schemes to remove restrictions improperly are a recurring enforcement theme. URL: https://marketmanipulation.org/glossary/restricted-securities/ ### Unregistered offering An unregistered offering is a sale of securities without a registration statement and without a valid exemption. It is unlawful under Section 5 of the Securities Act regardless of whether anyone was deceived. URL: https://marketmanipulation.org/glossary/unregistered-offering/ ### Parking Parking is placing securities in a nominee's name while retaining the real economic interest, in order to disguise ownership, evade position limits or defeat registration requirements. URL: https://marketmanipulation.org/glossary/parking/ ### Nominee account A nominee account is held in one person's name for another's benefit. Nominee structures are ordinary in custody arrangements and become a problem when used to conceal control or coordinate trading. URL: https://marketmanipulation.org/glossary/nominee-account/ ### Beneficial ownership Beneficial ownership is the real economic interest in a security, regardless of whose name it is held in. It determines disclosure obligations and is the concept that makes a wash trade identifiable at all. URL: https://marketmanipulation.org/glossary/beneficial-ownership/ ### Death spiral financing Death spiral financing is a convertible instrument that converts into stock at a discount to the prevailing market price, so that each conversion dilutes existing holders and pushes the price lower, entitling the holder to still more shares. URL: https://marketmanipulation.org/glossary/death-spiral-financing/ ### Dilution Dilution is the reduction in existing shareholders' proportional ownership when new shares are issued. It is a normal consequence of raising equity and becomes abusive when the issuance is structured to transfer value rather than raise it. URL: https://marketmanipulation.org/glossary/dilution/ ### Convertible note A convertible note is debt that can be exchanged for equity on stated terms. The manipulation risk lies entirely in the conversion formula: a fixed price is benign, a floating discount to market is not. URL: https://marketmanipulation.org/glossary/convertible-note/ ### Benchmark A benchmark is a published reference price or rate that contracts settle against. Because a benchmark converts one number into payments across many contracts, moving it is unusually profitable relative to the effort required. URL: https://marketmanipulation.org/glossary/benchmark/ ### Submission-based benchmark A submission-based benchmark is calculated from figures that panel members report rather than from observed transactions. The design invites manipulation, which is why post-scandal reform has pushed benchmarks toward transaction data. URL: https://marketmanipulation.org/glossary/submission-based-benchmark/ ### LIBOR LIBOR was a submission-based interbank interest rate benchmark, discontinued for most currencies and tenors by 2023 after widespread manipulation was established. It is the standard illustration of why benchmarks built on estimates rather than trades are fragile. URL: https://marketmanipulation.org/glossary/libor/ ### Fixing A fixing is the determination of a benchmark price at a specific moment, usually by observing trading in a short window. Concentrating price determination into a window creates a well-defined target for anyone wanting to move it. URL: https://marketmanipulation.org/glossary/fixing/ ### Settlement price The settlement price is the official end-of-session price used to mark positions, calculate margin and settle expiring contracts. Its official status is what makes moving it valuable. URL: https://marketmanipulation.org/glossary/settlement-price/ ### Pinning Pinning is the tendency of a stock to close near a heavily traded option strike at expiry, produced by hedging flows. Ordinary pinning is a mechanical effect; deliberately trading to force it is manipulation. URL: https://marketmanipulation.org/glossary/pinning/ ### Gamma hedging Gamma hedging is the continual adjustment of a delta hedge as the underlying price moves. In aggregate it mechanically dampens or amplifies price moves near option strikes, which is the innocent explanation for most pinning. URL: https://marketmanipulation.org/glossary/gamma-hedging/ ### Rug pull A rug pull is a crypto scheme in which the developers withdraw the liquidity backing a token, or mint unlimited new supply, leaving holders with an asset that has no bid at any price. URL: https://marketmanipulation.org/glossary/rug-pull-term/ ### Liquidity pool A liquidity pool is a smart contract holding two or more assets against which traders swap, with prices set by a formula rather than an order book. Whoever controls the pool's deposits controls whether anyone can sell. URL: https://marketmanipulation.org/glossary/liquidity-pool/ ### Automated market maker An automated market maker prices swaps from the ratio of assets in a pool using a fixed formula, with no order book and no discretionary quoting. Its determinism is what makes sandwich attacks reliably profitable. URL: https://marketmanipulation.org/glossary/automated-market-maker/ ### Sandwich attack A sandwich attack places one transaction immediately before a victim's pending swap and another immediately after it, moving the pool price so the victim trades at a worse rate and the attacker captures the difference. URL: https://marketmanipulation.org/glossary/sandwich-attack/ ### Maximal extractable value Maximal extractable value is the profit obtainable by choosing the order, inclusion or exclusion of transactions in a block. Some of it is benign arbitrage; some of it is straightforward front-running of visible pending transactions. URL: https://marketmanipulation.org/glossary/maximal-extractable-value/ ### Mempool The mempool is the public queue of pending blockchain transactions waiting to be included in a block. Its visibility is what makes on-chain front-running possible without any privileged access. URL: https://marketmanipulation.org/glossary/mempool/ ### Price oracle A price oracle supplies external price data to a smart contract. If a protocol reads its oracle from a shallow pool, an attacker can move that pool briefly and make the protocol act on a false price. URL: https://marketmanipulation.org/glossary/price-oracle/ ### Flash loan A flash loan is an uncollateralised loan that must be borrowed and repaid within a single transaction. It removes capital as a barrier to manipulation, letting an attacker move a market with money they do not have. URL: https://marketmanipulation.org/glossary/flash-loan/ ### Perpetual futures A perpetual future is a derivative with no expiry, held in line with the spot price by periodic funding payments between longs and shorts. It is the dominant instrument on crypto derivatives venues. URL: https://marketmanipulation.org/glossary/perpetual-futures/ ### Funding rate The funding rate is the periodic payment between long and short holders of a perpetual future that keeps its price anchored to spot. Manipulating the inputs to the funding calculation is a distinct crypto-native abuse. URL: https://marketmanipulation.org/glossary/funding-rate/ ### Token A token is a unit of value recorded on a blockchain. Whether a particular token is a security is a legal question decided on its economics and marketing, not on the technology used to record it. URL: https://marketmanipulation.org/glossary/token/ ### Digital asset Digital asset is the neutral regulatory term for cryptocurrencies and tokens. Its neutrality is deliberate: it avoids prejudging whether a given asset is a security, a commodity or neither. URL: https://marketmanipulation.org/glossary/digital-asset/ ### Howey test The Howey test asks whether an arrangement is an investment of money in a common enterprise with an expectation of profits derived from the efforts of others. It determines whether an instrument is an investment contract and therefore a security. URL: https://marketmanipulation.org/glossary/howey-test/ ### Security A security is a tradable financial instrument that falls within the statutory definition — stocks, bonds, options and investment contracts among them. The classification determines which regulator has authority and which antifraud provisions apply. URL: https://marketmanipulation.org/glossary/security/ ### Commodity A commodity, in US law, is far broader than a physical good: the Commodity Exchange Act's definition reaches most things underlying a futures contract, which is how bitcoin came within CFTC authority. URL: https://marketmanipulation.org/glossary/commodity/ ### Futures contract A futures contract is a standardised agreement to buy or sell an asset at a set price on a set future date, traded on a designated contract market and cleared centrally. URL: https://marketmanipulation.org/glossary/futures-contract/ ### Open interest Open interest is the number of derivative contracts outstanding and not yet closed or delivered. Open interest that is large relative to deliverable supply is the classic precondition for a squeeze. URL: https://marketmanipulation.org/glossary/open-interest/ ### Position limit A position limit caps how large a position a single participant may hold in a contract. Limits exist specifically to make corners harder, and evading them through nominee accounts is itself an offence. URL: https://marketmanipulation.org/glossary/position-limit/ ### Option An option is a contract giving the right, but not the obligation, to buy or sell an asset at a set price before or at expiry. Options concentrate economic exposure at specific strike prices and expiry dates, which creates manipulation targets. URL: https://marketmanipulation.org/glossary/option/ ### Strike price The strike price is the price at which an option may be exercised. Large open interest at a strike gives someone a concrete financial reason to want the underlying to close on one side of it. URL: https://marketmanipulation.org/glossary/strike-price/ ### Swap A swap is a bilateral contract to exchange cash flows calculated on a notional amount — commonly a fixed rate for a floating one. Swaps referencing a benchmark are what make benchmark manipulation lucrative at scale. URL: https://marketmanipulation.org/glossary/swap/ ### Notional amount The notional amount is the reference quantity used to calculate a derivative's payments. It is not money that changes hands, which is why aggregate notional figures overstate economic exposure, sometimes wildly. URL: https://marketmanipulation.org/glossary/notional-amount/ ### Exchange-traded fund An exchange-traded fund is a pooled vehicle whose shares trade on an exchange and are created and redeemed in large blocks by authorised participants against the underlying basket. URL: https://marketmanipulation.org/glossary/exchange-traded-fund/ ### Net asset value Net asset value is the per-share value of a fund's holdings. For funds holding illiquid or stale-priced assets, the inputs to net asset value can be influenced by trading in those assets near the valuation point. URL: https://marketmanipulation.org/glossary/net-asset-value/ ### Authorised participant An authorised participant is a firm entitled to create and redeem exchange-traded fund shares directly with the fund, arbitraging any gap between the fund's price and the value of its basket. URL: https://marketmanipulation.org/glossary/authorised-participant/ ### Mark to market Marking to market is valuing a position at current market prices. Because it converts a price into reported profit, collateral and margin, anyone whose compensation depends on the mark has a motive to influence the price used. URL: https://marketmanipulation.org/glossary/mark-to-market/ ### Penny stock A penny stock is a low-priced security, generally outside the major listing standards, with thin trading and limited public information. The combination of a small float and sparse disclosure is what makes it the standard vehicle for promotion fraud. URL: https://marketmanipulation.org/glossary/penny-stock/ ### Over-the-counter market An over-the-counter market is trading conducted off an exchange, through dealers. For small issuers it means fewer listing requirements and less disclosure, which is precisely the environment promotion schemes need. URL: https://marketmanipulation.org/glossary/over-the-counter/ ### Quotation medium A quotation medium publishes dealer quotations for securities that are not exchange-listed. Rule 15c2-11 governs who may publish a quote and what information must exist first — a rule that has been tightened specifically to squeeze out shells. URL: https://marketmanipulation.org/glossary/quotation-medium/ ### Short selling Short selling is selling borrowed securities in the expectation of buying them back cheaper. It is lawful, it improves price discovery, and it is regularly and incorrectly described as manipulation by the issuers it targets. URL: https://marketmanipulation.org/glossary/short-selling/ ### Naked short selling Naked short selling is selling short without having borrowed the security or arranged to borrow it. Regulation SHO restricts it and requires closing out failures to deliver; the extent of its real-world market impact remains genuinely contested. URL: https://marketmanipulation.org/glossary/naked-short-selling/ ### Failure to deliver A failure to deliver occurs when a seller does not deliver securities by the settlement date. Most failures are operational rather than sinister, which is why raw failure data is a poor proxy for naked shorting. URL: https://marketmanipulation.org/glossary/failure-to-deliver/ ### Regulation SHO Regulation SHO governs short sales in US equities, imposing locate and close-out requirements and a price test triggered by sharp declines. URL: https://marketmanipulation.org/glossary/regulation-sho/ ### Securities lending Securities lending supplies the borrowed stock that short selling requires, in exchange for a fee and collateral. Borrow cost is the main economic constraint on shorting and the main pressure point in a squeeze. URL: https://marketmanipulation.org/glossary/securities-lending/ ### Clearing house A clearing house interposes itself between buyer and seller, guaranteeing performance and collecting margin. Its margin calls are what turn a price move into forced liquidation, which is how squeezes propagate. URL: https://marketmanipulation.org/glossary/clearing-house/ ### Margin Margin is collateral posted against a position. Because margin requirements are calculated from marked prices, a manipulated price can force genuine participants to post cash or liquidate. URL: https://marketmanipulation.org/glossary/margin/ ### Foreign exchange market The foreign exchange market is the decentralised, mostly over-the-counter market in currencies. Its size and fragmentation made the daily benchmark fixes unusually influential and unusually exposed. URL: https://marketmanipulation.org/glossary/foreign-exchange-market/ ### Spot market A spot market trades an asset for immediate delivery, as opposed to a future date. The relationship between spot and derivatives prices is what makes cross-market manipulation possible. URL: https://marketmanipulation.org/glossary/spot-market/ ### Cash market The cash market is the market in the underlying asset itself rather than in derivatives on it. Manipulating one to profit in the other is the defining structure of cross-market schemes. URL: https://marketmanipulation.org/glossary/cash-market/ ### Basis The basis is the difference between an asset's cash price and the price of a derivative on it. Basis relationships are normally arbitraged tight, so a distorted basis is a signal that something is interfering with one of the two markets. URL: https://marketmanipulation.org/glossary/basis/ ### Arbitrage Arbitrage is profiting from a price difference between related instruments or venues. It is the mechanism that keeps prices consistent, and it is lawful — arbitrage exploits a real discrepancy rather than creating a false one. URL: https://marketmanipulation.org/glossary/arbitrage/ ### Insider trading Insider trading is dealing on material non-public information in breach of a duty of trust or confidence. It is distinct from manipulation: it exploits a true signal others cannot see, rather than injecting a false one. URL: https://marketmanipulation.org/glossary/insider-trading-term/ ### Material non-public information Material non-public information is information a reasonable investor would consider important that has not been disclosed to the market. Possessing it is not unlawful; trading on it in breach of a duty is. URL: https://marketmanipulation.org/glossary/material-non-public-information/ ### Misappropriation theory The misappropriation theory holds that trading on confidential information in breach of a duty owed to its source is securities fraud, even where no duty is owed to the people on the other side of the trade. URL: https://marketmanipulation.org/glossary/misappropriation-theory/ ### Front running Front running is trading ahead of a customer order, or another order one knows is coming, to profit from the price impact that order will have. It breaches a duty to the customer, which is what separates it from ordinary anticipation of market direction. URL: https://marketmanipulation.org/glossary/front-running-term/ ### Best execution Best execution is a broker's obligation to seek the most favourable terms reasonably available for a customer order. It is the duty that front running and order-routing abuses violate. URL: https://marketmanipulation.org/glossary/best-execution/ ### Order routing Order routing is the decision about where to send an order for execution. Because routing decisions can be influenced by rebates and payment arrangements, they sit in permanent tension with best execution. URL: https://marketmanipulation.org/glossary/order-routing/ ### Payment for order flow Payment for order flow is compensation a broker receives for directing customer orders to a particular market maker. It is legal in the United States, disclosed, and contested — but it is not manipulation. URL: https://marketmanipulation.org/glossary/payment-for-order-flow/ ### Churning Churning is excessive trading in a customer's account, driven by the broker's commissions rather than the customer's objectives. It defrauds one customer rather than distorting a price, which is why it sits outside manipulation proper. URL: https://marketmanipulation.org/glossary/churning-term/ ### Suitability Suitability is the obligation to recommend only investments appropriate to a particular customer's circumstances. In the United States it has largely been superseded for retail recommendations by Regulation Best Interest. URL: https://marketmanipulation.org/glossary/suitability/ ### Ponzi scheme A Ponzi scheme pays returns to earlier investors from later investors' money rather than from genuine profits. It is investment fraud rather than market manipulation: no market price is distorted, because usually no real trading occurs at all. URL: https://marketmanipulation.org/glossary/ponzi-scheme-term/ ### Volume-weighted average price The volume-weighted average price is the average price over a period, weighted by volume traded at each price. It is used both as an execution benchmark and as a contractual reference, which makes it a manipulation target in its own right. URL: https://marketmanipulation.org/glossary/vwap/ ### Time-weighted average price The time-weighted average price is the average price over a period with equal weight to each time interval. Because it ignores volume, it can be moved with relatively little capital in a thin market. URL: https://marketmanipulation.org/glossary/twap/ ### Ticker symbol A ticker symbol is the short code identifying a security on a venue. Symbols are reassigned when companies fail or restructure, so historical references to a symbol do not necessarily refer to the same business. URL: https://marketmanipulation.org/glossary/ticker-symbol/ ### Tape The tape is the public record of executed trades, showing price and size. Wash trading and painting the tape both work by putting misleading entries onto it. URL: https://marketmanipulation.org/glossary/tape/ ### Closing auction A closing auction gathers orders into a single batch to set the official closing price. Concentrating the close into an auction improves price formation but also creates one identifiable moment worth attacking. URL: https://marketmanipulation.org/glossary/closing-auction/ ### Opening auction An opening auction sets the first official price of a session from accumulated orders. It matters less than the close for valuation purposes but is thinner, and therefore cheaper to move. URL: https://marketmanipulation.org/glossary/opening-auction/ ### Circuit breaker A circuit breaker halts trading when a price moves beyond a threshold in a short period, giving participants time to reassess. Halts interrupt momentum-based schemes but can also be triggered deliberately. URL: https://marketmanipulation.org/glossary/circuit-breaker/ ### Limit up, limit down Limit up, limit down is the US equity mechanism that prevents trades outside a moving price band and pauses trading when the band is tested. It exists to stop momentary dislocations becoming permanent prints. URL: https://marketmanipulation.org/glossary/limit-up-limit-down/ ### Compliance Compliance is the function inside a regulated firm responsible for ensuring it follows applicable rules. In manipulation matters, regulators routinely examine not just what the trader did but what compliance saw, alerted on, and then closed. URL: https://marketmanipulation.org/glossary/compliance/ ### Supervision Supervision is the obligation on a regulated firm to oversee its people and detect misconduct. Failure to supervise is an independent charge, so a firm can be liable even where it neither knew of nor participated in the manipulation. URL: https://marketmanipulation.org/glossary/supervision/ ### Control failure A control failure is a breakdown in the systems meant to prevent or detect misconduct. Many large penalties are imposed for control failures rather than for the underlying conduct, because the failure is easier to establish. URL: https://marketmanipulation.org/glossary/control-failure/ ### Alert An alert is an automated flag raised by a surveillance system. The overwhelming majority are false positives, so how a firm triages and documents them is often more probative than the alert itself. URL: https://marketmanipulation.org/glossary/alert/ ### False positive A false positive is a surveillance alert that turns out to be innocent activity. Manipulation detection operates at very low base rates, which means even an accurate model produces mostly false positives. URL: https://marketmanipulation.org/glossary/false-positive/ ### Base rate The base rate is the underlying frequency of an event in a population. Because manipulation is rare relative to total order flow, ignoring the base rate makes any detection statistic look far more damning than it is. URL: https://marketmanipulation.org/glossary/base-rate/ ### Trade reconstruction Trade reconstruction rebuilds the complete state of a market and a trader's activity at a given instant, from order messages, communications and system logs. It is the core investigative technique in modern manipulation cases. URL: https://marketmanipulation.org/glossary/trade-reconstruction/ ### Chat surveillance Chat surveillance monitors traders' electronic communications for evidence of collusion or intent. The benchmark cases were made substantially on chat transcripts, which is why retention rules are enforced so strictly. URL: https://marketmanipulation.org/glossary/chat-surveillance/ ### Recordkeeping Recordkeeping obligations require firms to preserve business communications in a retrievable form. Enforcement against the use of unmonitored messaging apps has produced some of the largest fines of the last decade, entirely independently of any manipulation. URL: https://marketmanipulation.org/glossary/recordkeeping/ ### Collusion Collusion is coordination between nominally independent participants to affect a price or share information. Because it converts several small positions into one large one, it can move markets that no single participant could. URL: https://marketmanipulation.org/glossary/collusion/ ### Cartel A cartel is a group coordinating to control a market. In the benchmark cases the traders' own chat rooms carried names of that flavour, which prosecutors used to establish the coordination directly. URL: https://marketmanipulation.org/glossary/cartel/ ### Whistleblower A whistleblower reports suspected violations to a regulator. US programmes pay a percentage of sanctions above a threshold, and a substantial share of large manipulation cases now originate this way. URL: https://marketmanipulation.org/glossary/whistleblower/ ### Referral A referral passes a suspected violation from one body to another — typically from an exchange or self-regulatory organisation to a government regulator. Most public enforcement begins as somebody else's alert. URL: https://marketmanipulation.org/glossary/referral/ ### Wells notice A Wells notice informs a person that SEC staff intend to recommend enforcement, and invites a written response. Receiving one is not a charge, and some matters end there. URL: https://marketmanipulation.org/glossary/wells-notice/ ### Subpoena A subpoena compels the production of documents or testimony. In market cases the critical productions are usually order data and communications, which is why retention obligations matter so much. URL: https://marketmanipulation.org/glossary/subpoena/ ### Expert testimony Expert testimony explains technical matters to a court. Manipulation trials turn heavily on it, because whether a pattern of orders is anomalous is not something a jury can assess unaided. URL: https://marketmanipulation.org/glossary/expert-testimony/ ### Event study An event study measures the price reaction to a specific event against what would otherwise have been expected. It is the standard method for establishing materiality and quantifying loss. URL: https://marketmanipulation.org/glossary/event-study/ ### Loss causation Loss causation is the requirement that the defendant's misconduct, rather than some other factor, caused the plaintiff's loss. It is a frequent battleground in private securities litigation and rarely an issue in regulatory actions. URL: https://marketmanipulation.org/glossary/loss-causation/ ### Private right of action A private right of action lets an injured party sue directly rather than relying on a regulator. Rule 10b-5 carries an implied one; most other manipulation provisions do not. URL: https://marketmanipulation.org/glossary/private-right-of-action/ ### Class action A class action lets many similarly situated plaintiffs sue as a group. Securities class actions often follow an enforcement action, using the regulator's allegations as their factual foundation. URL: https://marketmanipulation.org/glossary/class-action/ ### Deferred prosecution agreement A deferred prosecution agreement suspends criminal charges against a firm in exchange for admissions, penalties, reforms and a period of good behaviour. It is the usual resolution where indicting a firm outright would cause collateral damage. URL: https://marketmanipulation.org/glossary/deferred-prosecution-agreement/ ### Non-prosecution agreement A non-prosecution agreement resolves a matter without charges being filed at all, on similar terms to a deferred prosecution agreement. URL: https://marketmanipulation.org/glossary/non-prosecution-agreement/ ### Compliance monitor A compliance monitor is an independent party installed to oversee a firm's remediation under a settlement, reporting to the regulator or prosecutor. URL: https://marketmanipulation.org/glossary/monitor/ ### Cooperation credit Cooperation credit is the reduction in penalty a firm receives for self-reporting, cooperating and remediating. It explains a good deal of the variance in penalty sizes for apparently similar conduct. URL: https://marketmanipulation.org/glossary/cooperation-credit/ ### Self-report A self-report is a firm's voluntary disclosure of its own violation before the regulator finds it. It is the single largest determinant of cooperation credit. URL: https://marketmanipulation.org/glossary/self-report/ ### Remediation Remediation is the corrective action a firm takes after a violation — dismissals, systems changes, new controls. Regulators weigh it heavily, and settlement documents usually describe it in some detail. URL: https://marketmanipulation.org/glossary/remediation/ ### Restitution Restitution is a payment to compensate identified victims, distinct from disgorgement, which is measured by the wrongdoer's gain rather than the victims' loss. URL: https://marketmanipulation.org/glossary/restitution/ ### Fair fund A Fair Fund allows the SEC to distribute penalties as well as disgorgement to harmed investors. Identifying who was harmed by a manipulation is often impossible, which limits their use in these cases. URL: https://marketmanipulation.org/glossary/fair-fund/ ### Injunction An injunction is a court order requiring a person to stop violating, or not to violate, specified provisions. Breaching one is contempt, which gives it real force beyond its restatement of existing law. URL: https://marketmanipulation.org/glossary/injunction/ ### Conduct-based injunction A conduct-based injunction bars specific activity — participating in penny stock offerings, for instance — rather than merely restating a legal prohibition. It is more targeted and easier to police. URL: https://marketmanipulation.org/glossary/conduct-based-injunction/ ### Cease and desist order A cease and desist order is an administrative directive to stop violating a provision and not to do so again. It is the administrative counterpart of an injunction. URL: https://marketmanipulation.org/glossary/cease-and-desist-order/ ### Rule 15c2-11 Rule 15c2-11 requires that current public information about an issuer exists before a broker-dealer may publish quotations in its securities. Its 2020 amendments substantially reduced the population of quoted shell companies. URL: https://marketmanipulation.org/glossary/rule-15c2-11/ ### Form 8-K Form 8-K is the current report a US public company files to announce material events. Filing a false one, or filing on behalf of a company without authority, is a recurring manipulation vector. URL: https://marketmanipulation.org/glossary/form-8-k/ ### EDGAR EDGAR is the SEC's electronic filing system. Access credentials have been misused to file fabricated documents about real companies, which is why filer authentication has been tightened repeatedly. URL: https://marketmanipulation.org/glossary/edgar/ ### Schedule 13D Schedule 13D discloses beneficial ownership above five per cent of a class of registered equity, along with the holder's intentions. Concealed control blocks are usually concealed by not filing it. URL: https://marketmanipulation.org/glossary/schedule-13d/ ### Section 16 reporting Section 16 requires officers, directors and ten per cent holders of a public company to report their transactions promptly, and disgorges their short-swing profits. URL: https://marketmanipulation.org/glossary/section-16-reporting/ ### Blue sky laws Blue sky laws are US state securities laws, which operate alongside the federal regime. State regulators bring a substantial share of promotion and shell cases, particularly against smaller operators. URL: https://marketmanipulation.org/glossary/blue-sky-laws/ ### Market abuse regulation The Market Abuse Regulation is the European Union framework prohibiting insider dealing, unlawful disclosure and market manipulation. Its manipulation definition is broader and more explicitly enumerated than the US equivalent. URL: https://marketmanipulation.org/glossary/market-abuse-regulation/ ### Suspicious transaction report A suspicious transaction and order report is the filing European firms must make when they suspect market abuse. The obligation is on the firm to report suspicion, not to prove it. URL: https://marketmanipulation.org/glossary/suspicious-transaction-report/ ### Designated contract market A designated contract market is a CFTC-registered futures exchange. Registration status matters for the anti-spoofing provision, which is tied to trading on a registered entity. URL: https://marketmanipulation.org/glossary/designated-contract-market/ ### Registered entity A registered entity is a venue or clearing organisation registered with the CFTC. The concept draws the perimeter of several commodity-market prohibitions, including the express spoofing ban. URL: https://marketmanipulation.org/glossary/registered-entity/ ### Regulatory perimeter The regulatory perimeter is the boundary of what a regulator's authority reaches. Much of the difficulty in crypto enforcement is not about whether conduct was deceptive but about whether it fell inside anybody's perimeter. URL: https://marketmanipulation.org/glossary/regulatory-perimeter/ ### Offshore venue An offshore venue operates outside the jurisdiction whose participants it serves. Weaker surveillance and no order audit trail make abuse harder to detect there, which is a practical obstacle rather than a legal permission. URL: https://marketmanipulation.org/glossary/offshore-venue/ ### Median The median is the middle value of a sorted set. This site reports median penalties rather than mean penalties because a handful of very large settlements would otherwise dominate every average on the site. URL: https://marketmanipulation.org/glossary/median/ ### Mean The mean is the arithmetic average. For enforcement penalties it is a poor summary, because the distribution is extremely right-skewed and a single billion-dollar settlement moves it more than a hundred typical ones. URL: https://marketmanipulation.org/glossary/mean/ ### Skew Skew describes the asymmetry of a distribution. Enforcement penalties are heavily right-skewed: most are modest, and a few are enormous, which is why summary statistics must be chosen carefully. URL: https://marketmanipulation.org/glossary/skew/ ### Outlier An outlier is an observation far from the rest of the data. This site's charts show outliers rather than removing them, because in enforcement data the outliers are usually the most consequential cases. URL: https://marketmanipulation.org/glossary/outlier/ ### Interquartile range The interquartile range is the span between the twenty-fifth and seventy-fifth percentiles, covering the middle half of the data. It is the box in a box plot and a robust measure of spread. URL: https://marketmanipulation.org/glossary/interquartile-range/ ### Quantile A quantile is a cut point dividing a distribution into intervals of equal probability. Percentiles and quartiles are quantiles. URL: https://marketmanipulation.org/glossary/quantile/ ### Box plot A box plot summarises a distribution with its quartiles, a median line and whiskers, marking points beyond the whiskers individually. It is the right chart for penalty data precisely because it shows the spread rather than hiding it in an average. URL: https://marketmanipulation.org/glossary/box-plot/ ### Survivorship bias Survivorship bias is the distortion introduced by studying only the cases that made it into a sample. Enforcement data has it acutely: it records manipulation that was detected and charged, which is not the same population as manipulation that occurred. URL: https://marketmanipulation.org/glossary/survivorship-bias/ ### Selection bias Selection bias arises when the process producing a dataset is related to what the data is being used to measure. Regulators choose which cases to bring, so enforcement counts measure enforcement priorities as much as underlying conduct. URL: https://marketmanipulation.org/glossary/selection-bias/ ### Detection rate The detection rate is the share of actual violations that are found. It is unknown for market manipulation, and it is unknowable from enforcement data alone — which is why this site never presents case counts as a measure of how much manipulation occurs. URL: https://marketmanipulation.org/glossary/detection-rate/ ### Time to charge Time to charge is the interval between the conduct alleged and the action being filed. It is typically measured in years, which means a rise in filings in one year usually reflects conduct from several years earlier. URL: https://marketmanipulation.org/glossary/time-to-charge/ ### Aggregation Aggregation combines individual records into a summary figure. Aggregating enforcement penalties requires care about what is being added: penalty, disgorgement and interest are different things, and adding them without saying so overstates the fine. URL: https://marketmanipulation.org/glossary/aggregation/ ### Nominal versus real Nominal figures are in the currency of the day; real figures are adjusted for inflation. Penalty totals compared across a decade without adjustment overstate growth, and this site labels which basis each chart uses. URL: https://marketmanipulation.org/glossary/nominal-versus-real/ ### Structured data Structured data is information organised in a defined schema so that it can be queried and combined mechanically. Turning enforcement releases into structured records is the whole purpose of this site's case library. URL: https://marketmanipulation.org/glossary/structured-data/ ### Schema A schema defines the fields a record must have and what type each holds. Every case record on this site is validated against one at build time, so a malformed record fails the build rather than reaching a reader. URL: https://marketmanipulation.org/glossary/schema/ ### Validation Validation checks data against its schema and against additional rules. This site validates that every case has a resolvable primary-source link and that no record uses language inconsistent with its procedural status. URL: https://marketmanipulation.org/glossary/validation/ ### Machine-readable Machine-readable data can be parsed by software without human interpretation. Publishing the case library as clean JSON, rather than only as web pages, is a deliberate editorial choice. URL: https://marketmanipulation.org/glossary/machine-readable/ ### Open data Open data is published under terms that allow reuse and redistribution. This site's compiled case data and chart datasets are free to reuse with attribution; the underlying US government releases are not subject to copyright at all. URL: https://marketmanipulation.org/glossary/open-data/ ### US government work A work prepared by an officer or employee of the United States government as part of their official duties is not subject to copyright. SEC, CFTC and DOJ releases fall into this category, which is why they can be linked and described freely. URL: https://marketmanipulation.org/glossary/us-government-work/ ### Provenance Provenance is the documented origin of a piece of information. Every fact in this library traces to a named primary document, because a claim without provenance is not usable as reference material. URL: https://marketmanipulation.org/glossary/provenance/ ### Primary source A primary source is the original document — the complaint, the order, the release — rather than a description of it. Where this site's summary and the primary source disagree, the primary source is right. URL: https://marketmanipulation.org/glossary/primary-source/ ### Citation A citation identifies the source of a claim precisely enough for a reader to check it. Citation density is the practical difference between a reference work and an opinion piece. URL: https://marketmanipulation.org/glossary/citation/ ### Correction A correction is a public, dated record of an error and its fix. This site logs corrections rather than editing silently, because a reference work that revises itself invisibly cannot be relied on. URL: https://marketmanipulation.org/glossary/correction/ ### Editorial policy An editorial policy states how material is selected, described and revised. This site's policy governs how allegations are worded, when technique tags are applied, and what happens when a case is dismissed. URL: https://marketmanipulation.org/glossary/editorial-policy/ ### Taxonomy A taxonomy is a scheme for classifying things. This site's technique taxonomy is editorial, not legal: regulators charge statutory provisions, and mapping those to named techniques is a judgement the site makes and documents. URL: https://marketmanipulation.org/glossary/taxonomy/ ### Technique tag A technique tag links a case record to a manipulation technique. Tags are assigned by keyword rules over the regulator's own text, then reviewed; unreviewed records are marked as such on the page. URL: https://marketmanipulation.org/glossary/technique-tag/ ### Ingest pipeline An ingest pipeline fetches source documents, extracts structured fields and writes records. This site's runs daily against regulator indexes, caches everything it fetches, and never re-requests a document it already holds. URL: https://marketmanipulation.org/glossary/ingest-pipeline/ ### Rate limiting Rate limiting restricts how often a client makes requests. This site's crawler serialises requests per host with a delay and identifies itself with a contact address, because scraping public records is not a licence to burden the servers holding them. URL: https://marketmanipulation.org/glossary/rate-limiting/ ### Bucket shop A bucket shop took customers' orders and never sent them to a market, betting against the customer instead. Bucket shops were outlawed in the early twentieth century, and the prohibition is a direct ancestor of the rule that a displayed order must be real. URL: https://marketmanipulation.org/glossary/bucket-shop/ ### Stock pool A stock pool was a syndicate that accumulated a stock, traded it among themselves to create the appearance of activity, sold into the resulting public interest and dissolved. Pools were the specific abuse that Exchange Act section 9(a)(2) was written to prohibit. URL: https://marketmanipulation.org/glossary/stock-pool/ ### Pegging, fixing and stabilising Pegging, fixing or stabilising a price means trading to hold it at a particular level. It is prohibited in general but expressly permitted, within strict conditions, to support an offering under Regulation M. URL: https://marketmanipulation.org/glossary/pegging-fixing-stabilising/ ### Regulation M Regulation M restricts bidding for or purchasing a security by those participating in its distribution, during a defined restricted period. It is the rule that draws the line between lawful stabilisation and unlawful support of one's own offering. URL: https://marketmanipulation.org/glossary/regulation-m/ ### Open-market manipulation Open-market manipulation is manipulation carried out through transactions that are, individually, entirely ordinary and lawful. Courts have divided on whether trades that are facially legitimate can be manipulative purely by reason of intent, and the doctrinal question remains unsettled. URL: https://marketmanipulation.org/glossary/open-market-manipulation/ ### Marking-to-model Marking to model values a position using a valuation model rather than an observed price, which is unavoidable for illiquid instruments. It creates discretion, and discretion over one's own reported profit is a standing conflict of interest. URL: https://marketmanipulation.org/glossary/marking-to-model/ ### Manipulative device A manipulative device is the statutory phrase covering schemes that inject false information into price formation. Courts have read it as reaching conduct that is deceptive in effect, not merely statements that are false in words. URL: https://marketmanipulation.org/glossary/manipulative-device/ ### Deception Deception is the creation of a false impression. Manipulation cases turn on it: an order communicates a message about willingness to trade, so a fake order deceives without anyone saying a word. URL: https://marketmanipulation.org/glossary/deception/ ### Efficient market hypothesis The efficient market hypothesis holds that prices reflect available information. It matters legally because the fraud-on-the-market presumption of reliance in securities class actions rests on it. URL: https://marketmanipulation.org/glossary/efficient-market-hypothesis/ ### Fraud on the market The fraud-on-the-market doctrine presumes that investors in an efficient market rely on the integrity of the price, so a plaintiff need not show they read the misstatement. Without it most securities class actions would be uncertifiable. URL: https://marketmanipulation.org/glossary/fraud-on-the-market/ ### Corner squeeze distinction A corner is deliberate control of supply combined with a derivative position; a squeeze is the resulting price condition, which can also arise by accident. Conflating the two treats every sharp rally in a tight market as misconduct. URL: https://marketmanipulation.org/glossary/corner-squeeze-distinction/ ### Contango and backwardation Contango is a futures price above spot; backwardation is a futures price below it. Sharp backwardation in a delivery month is a classic symptom of a squeeze, though it also arises from genuine shortage. URL: https://marketmanipulation.org/glossary/contango-and-backwardation/ ### Free rider problem A free rider benefits from others' effort without contributing. In markets it explains why price-correcting research is undersupplied: whoever pays to uncover a fraud captures only part of the gain from correcting it. URL: https://marketmanipulation.org/glossary/free-rider-problem/