What term describes misleading investors or creating artificial demand to change stock prices for profit?

• A. Insider Trading
• B. Stock Manipulation
• C. Fraud
• D. Churning

Answer: (B)

Stock manipulation is when someone tries to move a stock’s price by misleading investors or creating artificial demand for personal profit. This isn't about using nonpublic information to trade (that would be insider trading), nor about a broker excessively trading a client’s account (churning), and it’s not a catchall for false statements (fraud)—it's specifically about tactics that distort supply and demand to inflate or depress prices. Examples include pump-and-dump schemes that hype a stock to raise its price and then sell, spoofing or layering that places large fake bids to create the illusion of demand, and wash trades that generate apparent activity without real economic risk. The key idea is the manipulation of price through deceptive or artificial market actions, aimed at profiting from those distorted prices.