Evidence-Based Theory of Market Manipulation And Application: The Malaysian Case
Heong, Yin Yun (2010) Evidence-Based Theory of Market Manipulation And Application: The Malaysian Case. [Dissertation (University of Nottingham only)] (Unpublished)
According to Part IX Division 1 in Securities Industry Act 1983 of Malaysia Law, stock market manipulation is defined as unlawful action taken either direct or indirectly by any person, to affect the price of securities of the corporation on a stock market in Malaysia for the purpose which may include the purpose of inducing other persons. Extending the framework of Allen and Gale (1992), the Author presents a theory based on the empirical evidence from prosecuted stock market manipulation cases in Malaysia. The first part of this paper reviews the market manipulation trading strategies which are used in the selected prosecuted corporate crimes, and three main manipulation schemes are coined, namely the volume-based, accounting-based and information-based manipulation. These three schemes are commonly used by the syndicates or insiders to defraud investors who making their investment decisions based technical, fundamental and sentimental analysis. This theory is thus can be adopted as an analytical tool for understanding, explaining and making predictions on the given subject matter.
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