The dazzling deceitful tricks of the stock
market.
Market Manipulation Definition, Types & Effects
This is not an AI generated article and all
the content is provided for analytical and educational purpose only. Improve your own analytical decision making
powers.
Rupee is continuously falling against the
dollar due to devaluation, trade imbalance, budget deficit, inflation, global
fuel prices, economic crisis etc. The
story of the rupee’s evolution is also the story of India’s changing economy as
it has gone through various ups and downs.
Whereas according to our so-called analysts, India is moving towards a
strong economy in the world.
Investment and Trading was an art of
speculation but now it has become a complete scam. Brokers were agents, but now they have become
secret scammers. Because 95% of the
people are losing money in the stock market while 5% of the people are in profit,
who are they? They are so called
operators and politically supported. Indian depository bodies are supposed to
be unbiased, whereas through political parties governance bodies appear to be
biased.
The four major segments of the stock market
are equity, derivatives, commodities and mutual funds as well as currencies and
cryptocurrencies. Among these we could
not tell which one is safe to invest because manipulation and scam are involved
everywhere.
Our market is classified among
Institutional Investors or Qualified Institutional Investors (QII), Commercial
Banks, Mutual Fund Houses, Public Financial Institutions and Foreign Portfolio
Investors fall in this category.
Basic
(ABCD) of the Digital Stock market:
Stock trading, also known as share trading
or exchange trading, is a practice that allows experienced traders to simulate
the process of buying and selling financial assets such as stocks for the use
of money and profit. Many years ago this could be through physical
transactions, now it is happening through digital or virtual transactions.
India has two primary depositories – NSDL
(National Securities Depository Limited) and CSDL (Central Depository Services
Limited). Since it isn’t possible to open an account and trade directly with
either of these bodies, depository participants step in.
You
must have a demat account for investment. There are three different types of
demat account available in India which are:
1.
Regular demat account.
2.
Repatriable demat account.
3.
Non-repatriable demat account.
DR Demat Account is a special purpose Demat
Account which facilitates holding of securities during the transit from
overseas Depository System to Indian Depository System.
The Demat account number and DP ID are not
the same. While the Demat account number is a 16-digit unique number assigned
to the account holder, the DP ID is an 8-digit number allocated to the
Depository Participant by the Depository.
Stock market is a deal of profits and
losses. In which after the loss of one
person, someone else gets profit. But as
of today, almost everyone is incurring losses and a few are making
profits. Because the stock prices are
deliberately manipulated by a group of brokers.
Perhaps you know that big investors have their own brokerage houses. In which small investors like us are cheated
by providing them annual membership. If
you invest money with the desire to get more profit in less time, then there is
no guarantee of your profit. And if you
are smart and have good knowledge of all the possible processes of the market,
then you can earn some money by joining these brokerage houses as a consultant
and analyst.
Some scammers are hidden, but there are
very few outright scammers. As a retail
investor you cannot gain profits without engaging third party consultancy
directly or indirectly.
Types of Investments
for Investors and Traders:
There are three types of investors in a
business: pre-investors, passive investors and active investors. Pre-investors are those who are not
professional investors. Investors in the
stock market are also classified between stock and equity investors and
traders. Here are the best types of
investments available in India:
1.
Investing in shares.
2.
Certificate of deposit.
3.
Bond.
4.
Investing in real estate.
5.
Fixed deposit.
6.
Mutual funds.
7.
PPF (Public Provident Fund)
8.
(NPS) National Pension System.
Shares are classified between a variety of
categories. Class A shares generally
have greater voting power and higher priority for dividends, while Class B
shares are ordinary shares without any preferential treatment. Class C shares may refer to shares offered to
employees or to public investors with different restrictions and voting rights.
Class D share is a mutual fund share that charges a level load and a back end
load. Effectively the investor who purchases a class D share will pay a blended
sales charge. The investor will pay a level load each year, plus a redemption
charge when the investor sells the shares.
Types of
share market segment & Sectors:
The four types of share markets are the
primary market (for new securities), the secondary market (for existing
securities), the equity market (for stocks), and the derivatives market (for
financial contracts based on underlying assets). Pillars of segmentation?
There are 11 stock market sectors, as
classified by GICS, which stands for Global Industry Classification Standard.
These sectors include healthcare, materials, real estate, consumer staples,
consumer discretionary, utilities, energy, industrials, consumer services,
financials, and technology
Seven Major Segments are there in the Stock
Market:
1.
Psychographic segmentation.
2.
Geographic segmentation.
3.
Behavioural segmentation.
4.
Benefit segmentation.
5.
Life stage segmentation.
6.
Firmographic segmentation.
7.
Demographic segmentation.
STP stands for segmentation,
targeting, and positioning.
These sections cover many areas. For
further details and information please visit NSE and BSE websites.
Clearance
and Settlement:
The clearing corporation fulfils its
role by transferring every trade to a clearing member or custodian. Their core
responsibility is ensuring that the funds and shares are available on T+1 Day.
They need to have a clearing pool DEMAT Account with a depository for receiving
and sending shares pertaining to the trade. These clearing corporation are
working in Indian share market for clearing and settlement.
1.
Indian Clearing Corporation Ltd.
2.
Multi Commodity Exchange Clearing
Corporation Ltd.
3.
National Commodity Clearing Ltd.
4.
AMC Repo Clearing Limited. NSE Clearing
Limited.
5.
NSE Clearing Limited
For further details and information please
visit NSE and BSE websites.
Latest
Techniques of Scam:
People are being cheated every day in the
name of profit in the stock market, an awareness campaign is being run by the
government regulator regarding this and people are being asked to call 1930 to
complain about fraud.
Daily newspapers are publishing news of
stock market scams every day in which scammers present themselves as advisors
and investors such as individual investors, social institutional and foreign
institutional investors. On their part,
money is obtained by luring people with high returns and huge profits, people
are lured with investment schemes, after receiving money they stop their
advisory services and disappear, then people
feel that they have been duped by fake advisors. Due to lack of proper system to report the
frauds of these scammers, their money is lost.
The government has also solved fraud cases by arresting some
conspirators. An awareness campaign is
being run by the government, but there is a need to make concrete arrangements
for this.
Stock exchange is a digitally virtual
trading platform for financial deals with delivery and transactions. This type of betting should be monetized
through global regulatory to stop the dictatorship of corporate houses.
The
WTO platform offering physical import-export of production and manufacturing to
meet demand and supply is a basic format of trade.
This type of betting should be monetized through
global regulatory like (WTO) to stop the dictatorship of corporate houses. Physical and virtual stock exchanges are
proportional to each other, both being a measure of the financial wealth of any
country.
As per history the market is always
influenced by sentiments, news and financial results, but a dark side is at
work here too, that is the news and results are manipulated which is actually
causing harm to innocent traders. The
one who is spreading such clever things is called a market analyst, who is
giving his analysis and opinion about the stock market which is completely
biased, even he is doing it for educational purpose. Giving to people. Common investors are misled by social media
analysts by misusing various types of data.
Those who do this are the so-called stock market advisors, which include
the so-called market analysts who are broadcast on news channels.
These analysts and advisors offer common
and uninformed investors to join the business groups run by them. Before analyzing and joining they give a
warning that they are not SEBI registered and SEBI registered people are also
doing the same. But SEBI disseminates
awareness campaigns and notifications only with caution and alertness.
New
technique of stock Manipulations:
Social media influencers and registered
financial advisors and so-called analysts are present as scammers in the
market. They are offering people to join
various groups for educational purposes.
Now the main game begins after the retail investors have gathered and
joined each other's groups. These
scammers are also managing trusts and fund houses on behalf of the trustees.
Fund House? Alternatively known as Asset Management Companies (AMC), fund
houses are organizations that invest pooled in money from investors into
financial instruments like equities, mutual funds, securities, etc. A fund house can create its own separate
index of equities, individually they are opening mutual funds by the process of
systematic and lump sum investment plans.
Some of these are profitable and some are average in performance, but
investors are not always turning out to be profitable. If you don't believe my research then analyze
the profit statement of your portfolio.
Fortunately retail investors are making profits, but fund houses were
always in profits, even the regulatory authorities are making profits,
including governments. I do not want to
create any controversy about my blog by quoting and referring to NSE and BSE. You all are educated and understand these
things better than me.
Once the exchange supercomputers of data centre was hacked and some
specific person or fund house was using the real time data before NSE and
BSE. As of now private and public
sectors, government organizations are also becoming part of the market through
IPO. This is good, but it should be
evaluated based on limitations and observations. There have been many IPOs and fund listings
in this decade but you have to think who was the investor, retailers are not
able to invest billions and trillions then these investors should be considered
the owners of public private sector corporate houses. If regulatory authorities
and the judicial system attempt to investigate (digital) virtual trading and audit their
accounts, they may find a variety of suspicious actions by high net worth
corporate houses that knowingly divert the investments of retailers and
traditional traders. And trying to cause
loss by force. Scams like sharing confidential data of investors by influential
and registered and unregistered brokers may be exposed. And then sensitive, protected or confidential
information is misused to manipulate stock futures and options. Influencers and operators are turning these
leaked data into synthetic premiums for futures and spot prices. Virtual trading in the stock exchange should
be completely declared illegal, as one has to deal with futures premium which
is affecting the spot trade price. The
regulatory authority should evaluate such speculations itself.
I think this is enough for your understanding. AI based algorithms are very powerful, but it
is not enough to assess the sentiments of news based manipulation scams. The price action, fundamentals and indicators
of the virtual stock exchange are looking like toys, as HNI corporations are
collecting leaked data from brokers and operator before real time trading for
money flow in the opposite direction.
While the regulation authorities and the government are happy to earn
revenue from tax collection. This can
never be healthy money for financial deals.
This type of speculation is creating a black swan bubble. The market has become for financial growth,
it must be increasing day by day, just think about the currency deficit. The appreciation and devaluation of currency
completely depends on the physical trade of import and export. What will be our trade surplus if we remain
only importers instead of exporters?
What do you think about virtual trade exchanges now? The next scam could
be the currency or bond scam and it will be considered a black day across the
world.
Currency deficit:
The relative values of currencies are influenced by the demand for them,
and that demand is influenced by trade. If a country exports more than it
imports (known as a trade surplus), there is a high demand for its goods, and
thus, for its currency. Bond prices move in inverse fashion to interest rates,
reflecting an important bond investing consideration known as interest rate
risk. If bond yields decline, the value of bonds already on the market
move higher. If bond yields rise, existing bonds lose value.
Deficit occurs when payments for imports exceed receipts from exports. However, since imports are financed in
foreign currency, the increasing deficit results in increased demand for
foreign currency. This means that the
country is accumulating foreign liabilities locally.
Bonds are issued by governments and corporations: Many countries along with
private institutions are issuing their bonds to investors. Now due to global tensions, physical trade is
going to convert into import-export exchange of goods, oil, gas and FMCG. Thus virtual digital trading of currencies
and bonds is not safe.
As of now, AI doesn’t have real-time
information on current stock market scams. However, I can share some general
techniques that how scammers have historically used to manipulate share prices.
1.
Pump and
Dump:
Scammers artificially inflate the price of
a stock (the “pump”) by spreading positive rumours or false information.
Unsuspecting investors buy in, driving the price higher. Once the price peaks,
the scammers sell their shares (the “dump”), causing the stock to plummet. This
leaves other investors with losses.
2.
Spoofing
and Layering:
Scammers place large buy or sell orders to
create a false impression of market demand. When other traders react to these
orders, the scammers cancel them. This manipulates the stock price. Layering
involves creating multiple fake orders to amplify the effect.
3.
Insider
Trading:
Scammers with non-public information (such
as company executives) trade stocks based on that information. When the news
becomes public, the stock price adjusts, and the scammers profit.
4.
Wash
Trading:
Scammers simultaneously buy and sell the
same stock to create artificial trading volume. This gives the illusion of
market activity and attracts other investors. In reality, no real value changes
hands.
5.
Circular
Trading:
Scammers create a network of interconnected
companies. They trade shares among these companies, artificially inflating
prices. Investors are misled by the apparent demand.
6.
Front-Running:
Scammers execute trades ahead of large
institutional orders. They profit from the price movement caused by the
institutional trades.
Remember that regulatory bodies and
surveillance systems work to detect and prevent such scams. As an investor,
stay informed, diversify your portfolio, and be cautious of unusual market
movements. 📉🚫
Biggest Scammed and manipulators of the
Markets:
For real-time updates on specific scams,
consult reliable financial news sources and regulatory agencies. Always
exercise due diligence when investing.
Certainly! Let’s explore some of the most
significant stock market scams that have left a lasting impact on India’s
financial landscape:
1. Harshad Mehta Scam:
In the early 1990s, Harshad Mehta, an
influential stockbroker, orchestrated a massive fraud. He manipulated the stock
market by inflating the prices of shares through a complex web of transactions.
Mehta infamously inflated the price of ACC Ltd’s shares from Rs 200 per share
to a staggering Rs 9,000 per share in just three months. His actions led to a
scam involving Rs 5,000 crores, affecting several Indian banks1.
2. Satyam Scam:
Ramalinga Raju, the chairman of Satyam
Computer Services Ltd, masterminded this scam. His company was listed on the
Bombay Stock Exchange and NYSE. Raju inflated share prices by generating fake
sales and manipulating bank statements. When the recession hit in 2008, the
truth emerged, revealing the massive fraud. The company’s revenue figures were
artificially inflated, leading to a significant loss for investors. Raju was
eventually punished for his role in the scam, and Mahindra later acquired
Satyam12.
3. Kean Parekh Scam:
Ketan Parekh, a stockbroker, orchestrated
the second-largest stock market scam in India. He manipulated stock prices by
creating a nexus of interconnected companies. Parekh used circular trading and
fictitious transactions to inflate share prices artificially. His actions
caused significant losses for investors and shook the Indian stock market13.
4. Centennial Technologies (1996):
Emanuel Pinez, the CEO, falsely reported $2
million in revenue from PC memory cards. In reality, they were shipping fruit
baskets. The stock soared, but Centennial had overstated earnings by about $40
million. Investors lost almost all their investment in a once-promising
company.
5. Bre-X Minerals (1997):
This Canadian company claimed to have a
gold mine with over 200 million ounces. It turned out to be one of the largest
stock swindles in history. The stock collapsed, leaving investors
devastated.
6. Zzzz Best (1986)
Barry Minkow, the teenage owner of this
carpet cleaning company, orchestrated an elaborate fraud. He forged over 20,000
documents and sales receipts, deceiving auditors and investors. ZZZZ Best went
public, reaching a market capitalization of over $200 million. Minkow was
eventually sentenced to 25 years in prison1.
7. Bernie Madoff Scam:
Bernie Madoff’s Ponzi scheme defrauded
investors of billions. His firm promised consistent returns but was built
on lies and deception.
8. Enron Stock Scam:
Enron, once a Wall Street darling, engaged
in accounting fraud. Its stock plummeted, wiping out investors’ wealth.
9. WorldCom Scam:
WorldCom inflated profits through
accounting tricks. When the truth emerged, the stock crashed, causing
massive losses.
10.
Luckin
Coffee Scam:
Luckin Coffee, a Chinese coffee chain,
fabricated sales figures. Its stock price collapsed, impacting investors.
11. Jordan Belfort Scam:
The infamous “Wolf of Wall Street”
manipulated penny stocks, defrauding countless investors.
Blog
Extraction: ✨
Remember, understanding past disasters can
help us avoid similar issues in the future. Investing wisely and staying
informed are crucial to safeguarding our financial interests.
These
scams serve as cautionary tales, emphasizing the importance of transparency,
regulatory vigilance, and investor awareness in the stock market. 📉🚫
The stock market is a scale whose two sides will never be equal. As long as manipulation continues, the market
will continue.
Thus the fall in currency hinders the real growth of the country. Indians have worked hard to grow the Indian
economy 10 times in the last 20 years, but in dollar terms it has grown only 5
times. Do not consider this a political
post, this is not for those great scholars who connect everything with
politics. I doubt he has the economic
knowledge to understand these things.
How a sustained period of high inflation actually affects the real
growth in value of the economy. Now that
USD INR is on a new breakout despite the underperformance of the Dollar index,
it does not matter what happens in the next month, inflation on the ground will
be brutal in addition to whatever inflation data you see. This will happen no matter who is in power.
The stock market needs public forums at international level like Right to
Information and Traders/Investors Union for transparency. If traders are aware
of the market understanding then it may be possible that scammers cannot cheat
them. If anyone is cheated, they should
get the facility of compensation by the regulatory authority and the authorities
should have proper proportions and norms regarding contingency funds to meet
the losses of the traders.
If the above mentioned initiatives are not implemented and implemented
globally, we would have become scammers and so called politically supported
operators and brokers to make profits from the stock market as we do not make
profits as a normal investor and trader.
If we do not want to be as corrupt as them then we have to expose scams
like bond scams and data manipulation of politically ruling institutions. Be wary of brokers, analysts and social media
influenced and so called SEBI registered advisors as well as biased governance
bodies. I will see you in the next
presentation, until then I look forward to your comments and suggestions
regarding any changes and apologize.
There is no need to become a sycophant of any political party or
leadership, because no one is doing social work. Everyone wants name and fame. Before judging anyone, examine yourself, then
take a decision in favor of patriotism as well as your health and wealth. I love my India and my work. Thanks for being with me.
