Market manipulation in the securities market is a specific financial crime involving the artificial influence on prices through the distortion of supply and demand. With the development of the capital market in Georgia, this issue is becoming increasingly relevant for regulatory bodies such as the National Bank. Allegations of manipulation can be brought against brokers, traders, company executives, or investors suspected of misleading market participants. This action violates the principles of fair trading and threatens financial stability. Accusations are often based on complex economic analysis and interpretation of trading data, requiring the involvement of a lawyer with specialized knowledge. The defense must prove that the trading activity was based on a legitimate economic strategy and not on artificial market manipulation.
What does Market Manipulation Defense service cover?
Lawyers working on corporate and financial crimes offer clients services aimed at protecting their reputation and freedom:
- Analysis of trading data: Detailed study of exchange trading logs, orders, and transactions to refute signs of manipulation.
- Representation with the regulator: Interaction with the National Bank of Georgia and other supervisory bodies during the administrative proceedings stage.
- Financial expertise: Conducting economic expertise to substantiate that the price change was caused by objective market factors and not manipulation.
- Compliance check: Determining the compliance of the company's internal regulations and procedures with legislation.
- Criminal defense: If the case is transferred to the Prosecutor's Office, implementing full defense at the investigation and court stages.
Common Situations and Scenarios
Charges of market manipulation may be related to the following actions:
- Wash Trading: Buying and selling assets to oneself or related parties to artificially increase trading volume.
- Pump and Dump: Spreading false positive information to increase ("pump") the price of an asset in order to subsequently sell it at a high price ("dump").
- Spoofing: Placing large orders without the intention of executing them, solely to influence the price.
- Spreading false information: Publishing incorrect financial reports or news about the company to mislead investors.
- Price fixing: Agreement between market participants to maintain the price of an asset at a certain level.
Georgian Legislation and Legal Framework
The prohibition of market manipulation is provided for by the Law of Georgia on the Securities Market and the Criminal Code of Georgia. Legislation prohibits any action that creates a false impression of securities trading activity, demand, or price. Criminal liability arises if the manipulation caused significant damage or a large amount of illegal income was obtained. The National Bank, as a regulator, is authorized to impose substantial fines and suspend licenses, while the Prosecutor's Office investigates the criminal case. The defense strategy is often based on proving that the action was part of ordinary commercial risk.
Service Delivery Process
The client contacts a lawyer when receiving a notification from the regulator or being suspected by the investigation. The first stage involves an audit of trading history and analysis of communications (emails, chats). The lawyer prepares a response to the regulator's questions and attends administrative hearings. In the event of a criminal case being initiated, the defense moves to the investigative space, where the main goal is to prove the absence of intent. The process requires close cooperation with financial experts.
Why choose a specialist on Legal.ge?
Securities law is a narrow and specific field where a general profile lawyer cannot provide effective defense. Legal.ge gathers specialists who have experience in corporate and financial disputes. They understand the principles of stock exchange operations and regulatory requirements. A charge of market manipulation threatens your professional license and career, so choose qualified personnel. Find a lawyer with the appropriate competence on Legal.ge.
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