Expose Market Manipulation by Partnering With Our Securities and Commodities Fraud Attorneys

Market manipulation undermines the integrity of markets, harms everyday investors, and erodes public trust in the financial system. Whistleblowers with inside knowledge of these practices are often essential to exposing them.

• Spoofing, wash trading, pump and dump schemes, benchmark manipulation, and marking the close or open are among the most common forms of market manipulation.
• Market manipulation not only affects traditional trading in stocks, commodities, swaps, and other derivatives but also the rapidly expanding cryptocurrency and prediction markets.
• Whistleblowers can report these schemes to the SEC and CFTC Whistleblower Programs and may be eligible for significant financial rewards.
• Anyone with knowledge of market manipulation—including employees, industry participants, investors, or competitors—may qualify as a whistleblower.

If you have witnessed or discovered market manipulation, you do not have to stand up for justice on your own. Reach out to our experienced attorneys at Whistleblower Partners LLP for comprehensive guidance on how to blow the whistle on these illegal practices.

Common Types of Market Manipulation

Market manipulation takes many forms, but all share a common thread: they distort prices, volume, or other market signals to benefit dishonest actors at the expense of legitimate investors. Market manipulation can affect both the securities and commodities markets and remain a priority for the SEC and CFTC. The following are among the most prevalent types of market manipulation that whistleblowers have helped expose.

Spoofing

Spoofing occurs when traders place large buy or sell orders with the intent to cancel them before execution, creating a false impression of market demand or supply. By flooding the market with orders they never intend to fill, spoofers manipulate prices in their favor before quickly reversing course.

Wash Trading

Wash trading occurs when buy and sell orders are placed simultaneously—often by the same actor or coordinated parties—to artificially inflate trading volume. This creates a misleading picture of market activity, attracting other investors based on false signals of liquidity or interest.

Pump and Dump

Pump and dump schemes involve fraudsters artificially inflating the price of a security through false or misleading statements, promotional campaigns, or coordinated buying activity, and then selling their holdings at the inflated price before the market collapses, leaving ordinary investors with significant losses. Pump and dump schemes are particularly common in thinly traded or low-priced securities, where prices can be more easily manipulated.

Benchmark Manipulation

Benchmark manipulation occurs when traders or financial institutions manipulate key financial benchmarks—such as interest rates or foreign exchange rates—by submitting false data or coordinating trades to influence the benchmark’s published value, thereby profiting at the expense of counterparties and other market participants who rely on those benchmarks for pricing. High-profile enforcement actions involving LIBOR and foreign exchange rate manipulation have underscored the serious harm these schemes can cause to global financial markets.

Dark Pools

Dark pools are private trading venues that allow institutional investors to trade large blocks of securities away from public exchanges. While dark pools serve legitimate purposes, they can be abused when operators or participants exploit informational advantages, misrepresent order execution, or engage in predatory trading practices that harm other participants. Regulators have brought enforcement actions against dark pool operators for failing to protect their clients’ trading information and for giving preferential treatment to certain participants.

Marking the Close or Open

Marking the close or open is a manipulative practice where traders place buy or sell orders near the close or open of a trading session with the intent to artificially influence a security’s closing or opening price. This can be used to benefit positions in related securities, derivatives, or investment funds that are valued based on those prices. The SEC and CFTC actively monitor trading activity around market open and close for signs of this manipulation.

What Role Do Whistleblowers Play?

Whistleblowers play a vital role in helping the SEC and CFTC uncover market manipulation. Because these schemes are often carefully concealed, often involving complex strategies by sophisticated traders, regulators depend on insiders—employees, industry participants, or others with firsthand knowledge—to bring them to light. Whistleblowers who report through the SEC Whistleblower Program or the CFTC Whistleblower Program may be eligible for financial awards ranging from 10 to 30 percent of the sanctions collected by the government in successful enforcement actions.

How Can You Blow the Whistle?

You can report market manipulation by making a tip to the SEC Whistleblower Program or the CFTC Whistleblower Program. Whistleblower Partners has extensive experience assisting clients with both SEC and CFTC whistleblower submissions. If you are unsure whether the conduct you have witnessed rises to the level of illegal activity, it is a good idea to consult with an attorney experienced in securities and commodities fraud. Whistleblower Partners has the breadth of knowledge and experience to present these complex and difficult cases to the government and bring them to a successful resolution for our whistleblower clients.