Would you be surprised to discover that despite all the changes in regulation and technology, financial market fraudsters employ the same behaviours as they have been doing for centuries. A new report has analysed nearly 400 cases over 225 years.

The behaviours are

Price Manipulation

Circular Trading

Collusion & Information Sharing

Inside Information

Reference Price Influence

Improper Order Handling

Misleading Customers


A few examples                           

Fake News / Rumours (Bull and Bear Raiding)  

Oldest trick – take a position in a market, spread false rumours to drive price, take the profit and run.

A great example was in 1814, when investors bought a large position in UK government bonds and then handed out bill boards claiming that Napoleon was dead and the allies had had a great victory. Only today this would be done electronically and the whole scam executed in a matter of minutes.

Abuse of Market Pricing (Corners and Squeezes.)

A corner arises where a party attempts to achieve a dominant controlling position in a commodity, security and/or related derivatives to influence the price of the commodity, security or related derivatives and profit from that activity. This can be undertaken to drive prices or to support them. A squeeze arises where a party does not seek dominance but attempts to gain control of sufficient amounts of a commodity or security to impact prices.

Great examples are Nelson Bunker Hunt in the Silver Market in 1979 or the Porsche attempted takeover of Volkswagen in 2008.

The detailed behaviour table: