Market manipulation is a term that is often used to describe unethical or illegal practices in the financial markets. It can involve a variety of activities, including wash trading, market manipulation, and insider trading.
Wash trading refers to the practice of buying and selling the same security in order to create the illusion of activity and to artificially inflate the price of the security. It is illegal in most jurisdictions and may result in severe penalties.
Market manipulation involves taking advantage of a lack of market information or manipulating the market by creating false or misleading information in order to create an artificial market. This may include strategies such as market timing, price manipulation, and insider trading.
Exchanges are the venues in which securities are traded. They are responsible for setting the rules and regulations that govern the market and must ensure that investors are well-informed and protected from market manipulation. Exchanges also monitor the activities of market participants and take action when they detect any suspicious behavior.
In summary, market manipulation is a serious problem in the financial markets. It can involve a variety of activities, including wash trading, market manipulation, and insider trading. Exchanges are responsible for ensuring that investors are protected from such activities and for monitoring the activities of market participants.
