FSA wins injunction to stop market manipulation

GavelThe Financial Services Authority (FSA) has won an interim High Court injunction to prevent three companies from manipulating the market in UK-listed shares.

The UK regulator said it believes Swiss-based fund manager Da Vinci Invest alongside a Singapore-based firm of the same name and a third company, Mineworld, registered in the Seychelles, made more than £1m (€1.1m) between August 2010 and July 2011 from a process called “layering”.

This is where traders manipulate share prices by placing large orders for shares which they have no intention of allowing to trade. When the misleading orders move share prices up and down, the traders take advantage of the price changes while deleting the initial orders.

“These companies engaged in repeated cross-platform market manipulation, which the FSA will not tolerate,” said Tracey McDermott, the FSA’s acting director of enforcement and financial crime.

The injunction, which also applies to three traders based in Switzerland and Hungary, freezes the assets of the companies. The FSA said the investigation and the court case will continue.

©2011 funds europe