wash trade


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Wash

A situation in which the profit on one activity or investment equals the loss on another. When an investment is a wash, it is said to break even.

wash trade

A transaction designed to make it appear that a purchase and sale has occurred even though no change in ownership occurred. For example, an investor might simultaneously buy and sell shares in one company through two different brokerage firms in order to create the appearance of substantial trading activity that will draw in other investors. Wash trades are illegal.
References in periodicals archive ?
(http://www.ibtimes.co.uk/articles/432647/20130207/libor-fixing-scandal-icap-wash-trade-michael.htm) Spencer told investors : "We haven't found any wash trades that we've been involved in."
* UBS traders also entered into so-called "wash trades" to facilitate corrupt payments to at least three brokers, in relation to the setting of Japanese yen Libor.
In this regard, an order was passed against Pearl Capital Management (Pvt) Limited, a member of Karachi Stock Exchange (KSE) for execution of wash trades in its proprietary account and it was imposed penalty of Rs.100,000.
6 -- Securities and Exchange Commission of Pakistan (SECP) in the seven months of 2010, initiated legal proceedings in seven different cases for violations of securities laws with special reference to insider trading, short/blank selling, wash trades, erroneous trades and broker misconduct.