What is the definition of market manipulation?

The definition of market manipulation is centered around the idea of intentional interference with the free operation of the market. This implies that an individual or group deliberately engages in practices designed to mislead investors about the true state of the market, thereby affecting stock prices or trading volumes. Such actions can distort the price-setting mechanism of markets, ultimately harming investors and undermining the overall integrity of financial systems.

In contrast, voluntary manipulation of public perception focuses more on shaping how investors view or react to market conditions rather than directly affecting market prices. Legal adjustments made to financial forecasts are typically within lawful practices and do not constitute manipulation of the market. Random fluctuations in stock prices, while a potential occurrence in volatile markets, do not reflect intentional actions taken to distort market operations. Understanding the implications of market manipulation is crucial for maintaining fair trading environments and protecting investors from deceptive practices.