Two New Studies on Stock Market Manipulation

Abstract

1. MARKET MANIPULATION WITH “PUMP AND DUMP” AND “POOP AND SCOOP” METHODS

This study is based on a presentation held at Miskolc University Doctoral School of Law on 14 November, 2024, and aims to show briefly how stock exchange market manipulations via “pump and dump” and “poop and scoop” methods work in reality. In spite of the fact that these fraudulent methods can be distinguished from each other according to the different trading directions of the financial instrument under consideration, they are not the exact opposites of each other and also „pump and dump” is more common than the other manipulative tactic. In this paper I will present the main characteristics of these manipulations, and also provide an overview of their historical development. It will also be discussed that these strategies could be separately introduced into the Hungarian Criminal Code under the category of illegal market manipulation in the future.

2. ICEBERG OFFER. A SPECIAL, LEGAL TYPE OF OFFER FOR STOCK EXCHANGE TRADING IN THE DIGITAL AGE

In this study I aim to demonstrate briefly how the acceptance and proliferation of the legal institution of iceberg orders (hidden orders) in the frame of stock exchange trading results in new risks and threats. I will also discuss the opportunities it offers to certain actors of trading and who these actors are. Those who are not familiar with stock exchange procedures can only learn from articles published in the press that this construction can mostly be advantageous for institutional investors and it is used particularly for high value transactions. Therefore it is advisable to examine whether the lack of equal access to information can violate the existing trading principles and if so which principles are involved and to what extent they are eroded.