REMIT - Transactions Involving Fictitious Devices

1. REMIT Transactions Involving Fictitious Devices In this article, we’ll dive into additional types of transactions that can artificially affect the perceived value of particular wholesale energy stocks, driving them up so as to gain an illegal advantage for the fraudster traders who participate. Scalping and pump-and- dump In some cases, market manipulation involving fictitious devices and deception takes place through fraudulent media and internet communication channels. Another common form of deceptive trading that falls under this banner is a “pump and dump” scam. Circular trading and pre-arranged trading This is damaging because it artificially manipulates the market by making it appear that certain security has liquidity, suggesting there is market interest in a stock where they might be none. This trading can cause more investment in a stock because others could buy into it thinking there must be a legitimate reason for the interest and activity. All banned under REMIT All of these types of trades in the wholesale energy market fall under the heading of price positioning. They are banned under REMIT Article 5 rules stating that,“Any engagement [by a participant in the market] in any attempt to engage in, market manipulation on wholesale energy markets shall be prohibited.” Compliance is mandatory By law, companies must comply with REMIT rules. Penalties are not only leveled at individual traders involved with the smooth running of the European wholesale energy markets but also the companies they work for. Compliance is mandatory Website: https://www.shieldfc.com/