Market Abuse

The terms

• Bear Raiding

  Bear raiding is a manipulation tactic in which traders push down a share’s price, often through heavy short selling or negative rumours, so as to buy it back cheaply or profit from the fall.

  Domain: Financial Crime

• Benchmark Manipulation

  Benchmark manipulation is the rigging of a published reference rate or price, such as an interbank interest rate, by submitting false inputs or colluding, so that contracts tied to it settle in the manipulator’s favour.

  Domain: Financial Crime

• Communications Surveillance

  Communications surveillance is the monitoring of employees’ emails, chats, calls and messages, usually with automated screening, to detect market abuse, misconduct and breaches of rules such as leaked inside information.

  Domain: Financial Crime

• Cornering the Market

  Cornering the market means buying enough of a commodity, security or asset to control its supply, then forcing buyers or short sellers to pay inflated prices to get it.

  Domain: Financial Crime

• Front Running

  Front running is trading ahead of a client’s or the firm’s own large order, using knowledge of it, so as to profit from the price move the order is expected to cause.

  Domain: Financial Crime

• Information Barriers (Chinese Walls)

  Information barriers are controls that stop confidential information passing between parts of a firm, for example from advisory teams to trading desks, to prevent misuse of inside information and manage conflicts of interest.

  Domain: Financial Crime

• Inside Information

  Inside information is precise, non-public information about a company or financial instrument that, if it became known, would be likely to move the price. Using or passing it on can breach market abuse law.

  Domain: Financial Crime

• Insider Trading

  Insider trading is buying or selling securities while holding inside information, or passing that information on so that others can trade. In many countries it is a criminal and regulatory offence.

  Domain: Financial Crime

• Market Abuse

  Market abuse is the umbrella term for behaviour that distorts fair trading in financial markets, mainly insider dealing, unlawful disclosure of inside information and market manipulation.

  Domain: Financial Crime

• Market Manipulation

  Market manipulation is deliberate conduct that gives false or misleading signals about the price, supply or demand of a financial instrument, or holds its price at an artificial level, to profit or mislead others.

  Domain: Financial Crime

• Market Surveillance

  Market surveillance is the monitoring of orders, trades and prices, by exchanges, regulators and firms, to detect market abuse, rule breaches and disorderly trading.

  Domain: Financial Crime

• Momentum Ignition

  Momentum ignition is a manipulation tactic in which a trader places aggressive orders or trades to start a rapid price move, hoping others join in, then trades against the trend they triggered.

  Domain: Financial Crime

• Pool Trading

  Pool trading is an old manipulation scheme in which a group of traders agrees to trade a stock among themselves and with the public, lifting its price and activity, then sells their holdings at the higher level.

  Domain: Financial Crime

• Pump and Dump

  In a pump and dump, promoters buy a cheap security, talk its price up with misleading hype, and sell into the buying that follows, leaving latecomers with losses.

  Domain: Financial Crime

• Quote Stuffing

  Quote stuffing is a high-speed trading tactic of flooding a market with large numbers of orders and cancellations to slow other participants’ systems or hide the stuffer’s real activity.

  Domain: Financial Crime

• Spoofing

  Spoofing is entering orders you never mean to fill, then cancelling them, so other traders misread demand or supply and move the price in the spoofer's favour.

  Domain: Financial Crime

• Wash Trading

  Wash trading is trading with yourself or a partner, buying and selling the same asset so ownership never really changes, to fake volume or move the price.

  Domain: Financial Crime