Circular Trading

Circular Trading

A scheme in which a broker enters a sell order with the knowledge that an exactly offsetting buy order is being entered or will be entered at roughly the same time. Circular trading does not allow for competition and does not result in a change of beneficial ownership. For that reason, it is illegal.
References in periodicals archive ?
However, the central bank issued guidelines a week later that barred banks from buying bonds issued by other banks in order to forestall risks arising from circular trading, whereby lenders agree to buy each other's bonds.
Thirty- three entities allegedly involved in circular trading and share manipulation have been ordered by the Securities and Exchange Board of India ( Sebi) to appear before it.
The SECP has issued warning letters to 27 brokers of the Karachi Stock Exchange and 7 brokers of Lahore Stock Exchange for possible violations of the blank sales, wash sales, circular trading, cross trades, broker misconduct etc.
The company, based in Kanonji, Kagawa Prefecture, has admitted to involvement in so-called circular trading, engaging in sales and purchases of goods totaling more than 100 billion yen on fake invoices mainly aimed at padding sales.
Through the circular trading of the stock, Mitton manipulated the price from about $2.
SEBI intends to build analytical models using SAS([R]) Enterprise Miner[TM] to identify known market manipulation patterns such as circular trading, pump and dump, insider trading and front running.
The Sebi chairman explained that there are different kinds of frauds such as synchronised and circular trading, price manipulation and spoofing of markets with high frequency trading.
The company, based in Kanonji, Kagawa, has admitted to involvement in so-called circular trading, engaging in sales and purchases of goods totaling more than 100 billion yen on fake invoices mainly aimed at padding sales.
It goes on to say that ``the NASDAQ trading volume reflects either pre-arranged or circular trading by market makers.
Like his mentors the Mehta brothers, KP used to be involved in circular trading to jack up share prices for the benefit of promoters and himself before finally dumping devalued shares with financial institutions like UTI and LIC etc.
This circular trading scheme artificially inflated the reported trading volume by 42 percent and created the deceptive appearance of an active market in the stock.
DESPITE the Intelligence Bureau ( IB) clearly pointing out that banned stockbroker Ketan Parekh is still trading to rig share prices through circular trading, authorities are yet to establish it and the exchanges seem to be in denial mode.