Coral Capital Partners looks at a recent SEC Enforcement Action concerning Market Manipulation, Broker Bribery, and Matched Trades. In our look at this enforcement action we provide a detailed explanation of how these schemes work and the penalties for participating in these schemes. We feel that our blog along with the associated SEC Litigation Release and Complaint filed in Federal Court will provide an interesting reading.
Tag: broker bribery
The bribing of stock brokers by unscrupulous individuals where the stock brokers are paid illegally to recommend the purchase of shares of certain stocks to their clients, who are unaware of the arrangement. In a typical broker bribery scheme the stock broker will receive payment from an individual who has control over a large stock position that they are seeking to sell into the market at inflated prices. This typically involves very thinly traded securities. The individual will typically require the stock broker to direct the trades to a brokerage firm where they have set up an account to sell shares to the stock broker’s firm, thus ensuring that the shares bought are the shares they are trying to sell. This is an extremely serious violation of various sections of the Securities Act of 1933 and the Exchange Act of 1934.