Let me explain, " Suppose there X a private company, its board of directors want big profit what they will do. They will try to increase prices of his company's share. When they collect money in their personal pockets, they try to decrease the price. Suppose, I as a small investor buy Rs. 1,00,000 shares when the price of company shares was Rs. 100 because false expectations were created and this money went to director's personal pocket. Now, when share were bought, next day share market were down artificially means value of Rs. 100 will down up to Rs. 90 and other investors starts to sell shares and market again down and I sell shares of Rs. 100,000 in Rs. 10,000 with Rs. 90,000 loss. This is common story with every investor also."
All the nations have authorities to stop these cheating. In USA, the securities exchange Act 1934 is against this and wants to prohibit it. In India, SEBI Act 1992 is also against this and wants to stop at any cost. But cheaters saved with his money power and all these cheating done with different ways.
In wikipedia, there are given the examples by which cheaters of stock exchange do fraud. So, it is my personal request to read all these examples because to learn these techniques you can save your money from any cheating in this market. Same examples of wikipedia, I am showing here as quote basis.
Stock Manipulation Techniques
Ist Technique : Pools:
"Agreements, often written, among a group of traders to delegate authority to a single manager to trade in a specific stock for a specific period of time and then to share in the resulting profits or losses."
2nd Technique : Churning:
"When a trader places both buy and sell orders at about the same price. The increase in activity is intended to attract additional investors, and increase the price."
3rd Technique :Runs:
"When a group of traders create activity or rumors in order to drive the price of a security up." An example is the Guinness share-trading fraud of the 1980s. In the US, this activity is usually referred to as painting the tape.
4th Technique : Ramping (the market):
"Actions designed to artificially raise the market price of listed securities and to give the impression of voluminous trading, in order to make a quick profit."[5]
5th Technique : Wash trade:
"Selling and repurchasing the same or substantially the same security for the purpose of generating activity and increasing the price"
6th Technique : Bear raid:
"Attempting to push the price of a stock down by heavy selling or short selling."
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