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Predatory Trading and Crowded Exits: New thinking on market volatility by James Clunie

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Chapter 5. Manipulation

The manipulation of securities prices is widely regarded as market abuse, and is consequently considered to be both unethical and illegal [27] . However, markets are not free from manipulation, as evidenced by successful convictions and regulatory fines in various countries over the years. Consequently, traders and investors should gain an understanding of the nature and characteristics of securities manipulation, so as to avoid falling victim to it.

Citigroup

One example of a trading strategy that resulted in regulatory action comes from August 2004, when US bank Citigroup executed a series of trades in the eurozone government-bond market. Implementation of this strategy (nicknamed by Citigroup traders as the ...

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