Market manipulation is when someone artificially affects the supply or demand for a security (for example, causing stock prices to rise or to fall dramatically).
Market manipulation may involve techniques including:
- Spreading false or misleading information about a company;
- Engaging in a series of transactions to make a security appear more actively traded; and
- Rigging quotes, prices, or trades to make it look like there is more or less demand for a security than is the case.
Microcap stocks are more susceptible to market manipulation. Learn more.