Illegal to buy and sell stock to yourself?

Discussion in 'Trading' started by newestmember, Jan 22, 2004.

  1. Is it illegal to bid 1000 shares at $10 and then turn around and sell 1000 shares to your bid, to make it look as though someone's selling?

    I wonder sometimes if traders in the smaller stocks are doing this. Anyone?
  2. thats called "painting the tape" and it is illegal
  3. I think is it perfectly legal to make a cross trade. For instance, you have two brokers, and you buy from one and sell from the other. That is allowed I believe.
  4. Dustin


    Illegal even with 2 brokers, although I have done it a few times by accident and nothing happened.
  5. I bet a lot of hedge funds make a habit out of buying and selling to themselves in these little stocks.

    Whether it be through the same broker, or with multiple brokers, I bet this is one of their favorite ways to attract volume to a stock, or move it up and down...
  6. Toonces


    I did it a bunch of times a few years ago between two brokers before I found out it was illegal. (Not to paint the tape, but to avoid several partial fills from my secondary broker, which charged $20/ticket) Nothing ever happened to me either.
  7. I once shot a man in Reno, just to watch him die.

    Nothing happened to me, either.
  8. ElCubano

    ElCubano need not be on the other side to paint the tape...

    in fact in the smaller stock ( thinly traded BB's ) you would find this to be an expensive thing to do..considering there are no manning rules and the MM need not reflect your bid or offer...peace
  9. True..I should have been more specific. It can be anybody on the other long as your intention is to create the image of activity you are in effect manipulating the issue. Which we all know is illegal.
  10. tntneo

    tntneo Moderator

    there is also the issue of ownership transfer.
    a transaction should change ownership, otherwise it is manipulation as well as far as I know.
    #10     Jan 22, 2004