- This topic has 1 reply, 2 voices, and was last updated 12 years ago by
.
- Posts
@Mikelittle:
Can you please explain Market Abuse? Is it the same as Insider dealing? If not, please help me understand the difference.
What should be included in a 10 mark question on Market abuse?
Thanks 🙂Yes, my understanding is similar to yours. I think insider dealing is one example of market abuse. But there’s also the spreading of groundless rumour in order to ramp up the share price ( or equally to encourage a drop in the share price )
In addition, there’s the technique of repeated buying of a company’s shares to the extent that this activity is “noticed”. The market becomes aware of the unusual activity. This is then supported by a well-timed rumour … and the share price takes off sky-wards.
I seem to remember that this was the basis of the “South Sea Bubble” from Queen Victoria times but it was also the fever which attacked the market within the last 15 years where the “dot.com” companies saw an excited surge in their share price until investors realised that there was little of substance behind the share price rise
- You must be logged in to reply to this topic.