(236.) Rebecca Soderstrom, Regulating Market Manipulation: An Approach to Designing Regulatory Principles 23 (Uppsala Faculty of Law, Working Paper No.
Open-market manipulation captures the attention of lawmakers and courts because it is market manipulation effected entirely through facially legitimate transactions.
Indeed, the Commissions' intent-focused approach only exacerbates the chaos that currently surrounds the law of market manipulation and makes enforcement against open-market manipulation less effective.
Traditionally, the notion of market manipulation triggers ideas of deliberate misconduct that allows unscrupulous actors to profit at the expense of others.
In fact, Fischel and Ross go on to conclude that wash sales and matched orders--the most obvious types of market manipulations--are better analyzed as a "species of fraud" than as a separate category of market manipulations. Fischel & Ross, supra note 102, at 510-12.
The plaintiffs also alleged a welter of misrepresentations--in the registration statements and prospectuses themselves, and in analyst reports and other public statements--in support of these supposed market manipulations. Id.
Plaintiffs commonly bring two distinct types of claims under section 10(b) of the Securities Exchange Act of 1934: (1) claims of material misrepresentations or omissions, and (2) claims of trade-based market manipulation. Despite the distinctive features of the two types of claims, courts have tended to treat them identically when applying the "fraud on the market" doctrine.
To see why, one need only ask what conditions must be met for such a "trade-based" market manipulation to succeed.
This proposition provides new insights into corporate financial management and this perspective unifies much of the burgeoning market manipulation literature under a common framework.
Hart |28~ studies market manipulation in an infinite-horizon, deterministic, and stationary economy where the net demand function of nonmanipulators is exogenously specified to be a function of the past price series.
Treasury securities market gives an example of market manipulation of the type discussed in the two papers of Jarrow |30~ and |31~.
conduct is manipulative if it is designed to (i) interfere with the free play of supply and demand; (ii) induce people to trade; or (iii) force a security price to an artificial level." They argue that none of these characteristics leads to a clear definition of what constitutes a market manipulation.