Series 65: Market Manipulation

Market Manipulation

Make no mistake about it—regulators are happy for you and your clients to make a ton of money in the securities markets. What they don’t like, though, is professionals and their clients manipulating the markets deliberately through any of a variety of recognized taboo tricks. In other words, feel free to ride the roller coaster, just don’t make any attempts to drive it.

For the average investor, manipulating the stocks of the Dow Jones Industrial Average may be virtually impossible due to the sheer number of trades taking place each day and the large number of analysts covering each company. But rather substantial swings in the prices of thinly traded “penny stocks” can be accomplished with a much smaller amount of volume or a well-timed rumor.

This doesn’t mean that professionals o