What is stock market manipulation?

Definition and Examples of Stock Market Manipulation

Stock market manipulation schemes use social media, telemarketing, high-frequency trading, and other tactics to deliberately drive the stock price either up or down. Manipulators then profit from the price movements.

How Stock Market Manipulation Works

While there are countless variations, there are some common manipulation schemes:

Influencing Individual Investors

Unfortunately, investors are subjected to stock market manipulation schemes daily and often left unprotected. The Market Intelligence Office of the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Justice, and other commissions are responsible for detecting and preventing market manipulation fraud. If you believe you are a victim of fraud, or if you wish to report market manipulation anonymously, please contact the SEC. However, the best means of protection is to take simple steps before investing your money.

Be skeptical of any unsolicited investment offers and stock recommendations via email, social media, or the internet. Scam artists also use telemarketing and U.S. mail to promote their schemes. Investigate the source of any investment recommendation using FINRA’s brokercheck tool or the SEC’s Investment Adviser Public Disclosure. If they are not licensed, that’s a red flag. Don’t assume that a promoter recommended to you by someone you trust is legitimate. Endorsements from celebrities are not reliable. Newsletters are often used to promote fraudulent schemes. Be cautious of them. Research SEC.gov to see if anyone associated with the newsletter has legal actions against them. Small-cap stocks and stocks traded over-the-counter are high-risk and more susceptible to fraud. If you want to invest, research the SEC Edgar database for regular SEC reports. Avoid stocks that do not have regular reports. Check the SEC’s trading suspension list to see if a specific company is listed. High return promises and sales pressure to act now are red flags. Stay away from them.

Source: https://www.thebalancemoney.com/stock-market-manipulation-5184361