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Photo of attorneys E. Kelly Conway, Michael E. Gehring and Stephen G. Harvey

Pursuing litigation for market manipulation

On Behalf of | May 31, 2024 | Business Disputes

Market manipulation occurs when a bank or financial institution engages in practices that distort financial markets. These practices can include spreading false information, artificially inflating or deflating stock prices and executing trades to create misleading market trends. Such actions can mislead investors and disrupt the normal functioning of financial markets.

When a business suspects that its bank has been dishonest, sometimes the only recourse is through litigation.

The effects of market manipulation on companies

Market manipulation can disrupt a company’s business operations. It can affect the company’s ability to raise capital, plan strategic investments and maintain investor trust. When a bank manipulates the market, it creates uncertainty and instability, making it difficult for companies to make informed financial decisions. When investors become aware of what happened, stock prices may plummet. This situation can cause substantial losses for the affected companies.

Litigation to recover losses

Companies have several valid reasons to sue a bank for market manipulation. One reason is to recover money lost due to the bank’s actions. By suing the bank, the company can seek compensation for these losses.

Litigation for accountability

Another reason to pursue litigation is to hold the bank accountable for its actions. Market manipulation undermines the integrity of financial markets and harms all investors. By taking legal action, a company can help ensure that the bank faces consequences for its secretive activities.

Pursuing litigation against a bank for market manipulation serves to seek justice and prevent future harm. It sends a message that companies will not tolerate such practices and that they will take action to protect their interests. By holding the bank accountable, a company can contribute to a fairer and more transparent financial market.