plausible argument indeed, but i am sure the regulators will be looking out for such scams esp if the share is illiquid and the winner is as a result of a single trade. Q has been sent to regulators via FAQ,s Q: What happens if a person enters and goes into agreement with his friend? The friend manipulates the share price of a penny stock. The person entering the competition can take advantage of this. There are two different surnames and two different accounts at two different brokerages. The non-competing person can plead ignorance and it will be hard to prove different. Are you able to stop this? A: We share your concern and are confident that we will be able to identify any "price manipulation". In terms of your example, our comments are: 1. We carefully scrutinize the leaders and monitor their trades in order to pick up any irregularities that may occur. 2. Should anybody try to manipulate a share, one of the legs (either the buying or the selling leg) will have to be traded with the "friend" in your example. The point being that this trade will have to create an unnatural price movement in order to generate a profit. 3. In terms of the JSE's surveillance system, they can pick up any trades that would create an unnatural price movement. Remember that the friend cannot let the share drop again after the trade; that would be a giveaway. So the friend would need to keep the share at the unnatural level and be willing to support the share at this level. 4. The friend's trading history and pattern will have to show that the trade is natural and not as "price manipulation". The JSE's surveillance have access to all accounts at all stockbrokers and can analyze the friend's trading history and patterns in order to establish unnatural trading behaviour. 5. Any spike in a share is usually a giveaway. If the support (trading) is done over a longer period, the "friend" must be in a position to keep on buying the stock - also a giveaway. 6. Opening support (friend) accounts at various brokers will not help the manipulator. In terms of the JSE's surveillance they have access to all accounts through to the client level at all JSE member firms. In terms of the game rules, we have extensive rights to disqualify any entrant and will enforce this to make sure an honest participant wins the game. We have established a panel specifically to monitor suspicious trades. The panel will not hesitate to disqualify any participant, should they have any reason whatsoever to doubt the honesty of any trade! Please keep the following in mind: * The game is based on a cash-to-cash basis. You start with cash and you have to finish with cash. * We will black out the leader board during the last week. A prospective manipulator will therefore not know what he is chasing. * The JSE, as well as the principles involved, have years of market experience and will pick up any attempt at price manipulation with ease. FAQ'S
