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Wednesday, 4 January 2012

Rigging Share Prices is EASY!

Rigging Share Prices is EASY!

    The share price index of the Bombay Stock Exchange, SENSEX, has crossed the 12,000 mark. The way the SENSEX is shooting up, it can even be taken to the 20,000 mark in a few months. Why should anyone buy shares when the yearly dividends are less than even 1% of the market value of shares? A fundamental fraud on a massive scale is being committed against the interests of millions of Indian investors by international syndicates. This is an easy way to fleece the new investors by forcing them to pay highly inflated prices for shares in the stock market.
 
How are share prices artificially inflated?
 
    The biggest frauds are committed in the stock market by the rich investors who artificially fix the share prices. There are share-price rigging syndicates to do that work. One of the easiest ways to rapidly increase the values of shares is to exchange the shares at artificially inflated prices. Suppose two investors A and B have shares worth $100 million each. They can exchange their shares at an inflated value of $125 million for the holdings of each investor at the stock exchange. It will be easy to detect this act of share-price rigging involving only two investors. To camouflage the rigging, the exchange of shares can be made in a roundabout way between three, four, five or more investors. For example:
 
    Investor A  has shares worth $ 100 million
    Investor B  has shares worth $ 100 million
    Investor C  has shares worth $ 100 million
    Investor D  has shares worth $ 100 million
 
Investor A can sell his shares worth $100 million for $125 million to investor B.
Investor B can sell his shares worth $100 million for $125 million to investor C.
Investor C can sell his shares worth $100 million for $125 million to investor D.
Investor D can sell his shares worth $100 million for $125 million to investor A.
 
    In this simple example, the shares of equal total market value are exchanged at equally inflated prices in a circuitous way without any risk to the four investors. Each investor can exchange his shares at inflated prices for a total of $125 million with any one of the others. It can be a two-way, three-way or four-way exchange. Nobody is a loser in this way because each investor is paying and receiving 25% more than the "market price" for the shares exchanged. After getting the prices of their shares inflated artificially in this way, these four investors can sell their shares at huge profits to the new investors in shares.
 
    The big investors can even bring down the share prices and cause a crash in the share market by exchanging their shares worth $100 million each at a deflated value of $75 million each. Even in this type of exchange, none of the big investors is actually a loser. Deflation of the share prices becomes unavoidable when the share prices cannot be raised beyond a maximum limit at a particular period of time. After the  deflation of share prices takes place for some period, the process of inflating the share prices can again be started by the big investors with the help of the share-price rigging syndicates.
 
International Conspiracy to cheat Indian Investors
 
    International financial institutions with their vast resources can easily control and manipulate the share prices in many countries of the world. Because of the globalization of stock exchanges in India, huge funds are available to artificially fix the share prices. A huge conspiracy has been hatched by the international syndicates to cheat the millions of Indian investors who are doomed to get totally ruined. It is also crystal clear that many Indian politicians and bureaucrats are in league with the international syndicates which are artificially rigging the share prices in India.