Define: Manipulation

Manipulation
Manipulation
Quick Summary of Manipulation

Manipulation refers to the act of artificially inflating or deflating the price of a stock by creating the illusion of high buying or selling activity. This illegal practice is known as market manipulation or stock manipulation and is prohibited under the Securities Exchange Act of 1934.

Full Definition Of Manipulation

Securities manipulation involves the illegal act of artificially manipulating the price of a security by creating the illusion of active trading. This practice is prohibited by the Securities Exchange Act of 1934. For instance, a group of investors may collude to trade a specific stock among themselves, giving the impression of high trading activity and increasing the stock’s price. Once the price has risen, they can sell their shares to unsuspecting investors at the inflated price, resulting in a profit. Another form of manipulation is when a trader spreads false rumors about a company to induce panic among investors and prompt them to sell their shares, causing the stock price to decline. The trader can then purchase the shares at the lower price and sell them later at a higher price, making a profit. These examples demonstrate how manipulation can distort the true value of a security and negatively impact unaware investors.

Manipulation FAQ'S

No, manipulation itself is not illegal. However, certain forms of manipulation, such as fraud or coercion, can be illegal under various laws.

Manipulation refers to the act of influencing or controlling someone or something in a deceptive or unfair manner. It can involve tactics like lying, withholding information, or using psychological pressure to gain an advantage.

Yes, certain forms of manipulation can be considered criminal offenses. For example, manipulating financial markets or engaging in fraudulent schemes can be illegal under securities or fraud laws.

Yes, manipulation can also be a civil offense. For instance, if someone manipulates another person into signing a contract under false pretenses, the victim may have grounds to sue for fraud or misrepresentation.

While there may not be specific laws solely dedicated to manipulation, various legal principles and statutes can be applied to address manipulative behavior. These may include laws related to fraud, coercion, undue influence, or unfair trade practices.

Yes, manipulation can occur in personal relationships. Emotional manipulation, for example, involves using tactics like guilt-tripping, gaslighting, or manipulation of emotions to control or influence someone.

Yes, workplace manipulation can take various forms, such as manipulation of information, power dynamics, or interpersonal relationships. It can lead to a hostile work environment or unfair treatment of employees.

To protect yourself from manipulation, it is important to be aware of common manipulation tactics, trust your instincts, and maintain healthy boundaries. Educating yourself about manipulation techniques can help you recognize and respond to them effectively.

The consequences of being caught manipulating can vary depending on the specific circumstances and applicable laws. It can result in criminal charges, civil lawsuits, financial penalties, loss of reputation, or even imprisonment, depending on the severity of the manipulation and the jurisdiction.

If you believe you have been a victim of manipulation or have witnessed manipulative behavior, you can report it to the appropriate authorities or seek legal advice. Contacting law enforcement, regulatory agencies, or consulting an attorney can help you understand your options and take appropriate action.

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Disclaimer

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 17th April 2024.

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