Market Manipulation
Conduct that creates a false appearance of market activity or price: pump-and-dump promotions, wash trades (trading with yourself), matched orders, spoofing/layering with fake orders, and marking the close.
The exam rarely names the scheme for you — it describes the mechanics and makes you classify. The tell is whether the conduct creates a false impression of activity, price, or demand: simultaneous matched buys and sells, hyped emails before a sell-off, or orders entered only to be canceled. The hinge is intent to deceive the market itself, not to profit from secret information — that distinction is what most questions reward.
The classic trap is confusing manipulation with its siblings. Insider trading turns on material nonpublic information and a breached duty; front running is a priority violation — trading ahead of a known customer order — even though no false price is created; freeriding is a Regulation T payment failure (selling a security before paying for the purchase in a cash account), not deception at all. Memory hook: manipulation fakes the tape, insiders know a secret, front-runners cut the line, and freeriders never paid. If the wrong “person” is misled — the market versus a counterparty versus the clearing system — you’ve picked the wrong answer.
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