**(a) Transactions relating to purchase or sale of security** It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange—
(1) For the purpose of creating a false or misleading appearance of active trading in any security other than a government security, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or (B) to enter an order or orders for the purchase of such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (C) to enter any order or orders for the sale of any such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the purchase of such security, has been or will be entered by or for the same or different parties.
(2) To effect, alone or with 1 or more other persons, a series of transactions in any security registered on a national securities exchange, any security not so registered, or in connection with any security-based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.
(3) If a dealer, broker, security-based swap deal
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Stable record: federal_law:legal_authorities:record_usc_e0978db636a8432801ca417e Source file: Laws/federal/codes/united-states-code/title-15/section-78i-manipulation-of-security-prices--6fcb3a58c0.md Pages: Not recorded – Not recorded Passage SHA-256: ba9a6c0dbe5d9280f29aa395ee0ce784032bb9947456861874a6a64ec75fdbb2 Retained source evidence SHA-256: 13b9169eb96033a29dfb20015674ba0325cc136a9f3a92de0e375efb9cf93111
Source location: Title 15, Chapter 2B, § 78i; chapter-2b-securities-exchanges.md
Stored source content
**(a) Transactions relating to purchase or sale of security** It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange—
(1) For the purpose of creating a false or misleading appearance of active trading in any security other than a government security, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or (B) to enter an order or orders for the purchase of such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (C) to enter any order or orders for the sale of any such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the purchase of such security, has been or will be entered by or for the same or different parties.
(2) To effect, alone or with 1 or more other persons, a series of transactions in any security registered on a national securities exchange, any security not so registered, or in connection with any security-based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.
(3) If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or a security-based swap agreement with respect to such security, to induce the purchase or sale of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination in the ordinary course of business of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security.
(4) If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to make, regarding any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security, for the purpose of inducing the purchase or sale of such security, such security-based swap, or such security-based swap agreement any statement which was at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, and which that person knew or had reasonable ground to believe was so false or misleading.
(5) For a consideration, received directly or indirectly from a broker, dealer, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to induce the purchase of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of the market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security.
(6) To effect either alone or with one or more other persons any series of transactions for the purchase and/or sale of any security other than a government security for the purpose of pegging, fixing, or stabilizing the price of such security in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
**(b) Transactions relating to puts, calls, straddles, options, futures, or security-based swaps** It shall be unlawful for any person to effect, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors—
(1) any transaction in connection with any security whereby any party to such transaction acquires—
(A) any put, call, straddle, or other option or privilege of buying the security from or selling the security to another without being bound to do so;
(B) any security futures product on the security; or
(C) any security-based swap involving the security or the issuer of the security;
(2) any transaction in connection with any security with relation to which such person has, directly or indirectly, any interest in any—
(A) such put, call, straddle, option, or privilege;
(B) such security futures product; or
(C) such security-based swap; or
(3) any transaction in any security for the account of any person who such person has reason to believe has, and who actually has, directly or indirectly, any interest in any—
(A) such put, call, straddle, option, or privilege;
(B) such security futures product with relation to such security; or
(C) any security-based swap involving such security or the issuer of such security.
**(c) Endorsement or guarantee of puts, calls, straddles, or options** It shall be unlawful for any broker, dealer, or member of a national securities exchange directly or indirectly to endorse or guarantee the performance of any put, call, straddle, option, or privilege in relation to any security other than a government security, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
**(d) Transactions relating to short sales of securities** It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange to effect, alone or with one or more other persons, a manipulative short sale of any security. The Commission shall issue such other rules as are necessary or appropriate to ensure that the appropriate enforcement options and remedies are available for violations of this subsection in the public interest or for the protection of investors.
**(e) Registered warrant, right, or convertible security not included in “put”, “call”, “straddle”, or “option”** The terms “put”, “call”, “straddle”, “option”, or “privilege” as used in this section shall not include any registered warrant, right, or convertible security.
**(f) Persons liable; suits at law or in equity** Any person who willfully participates in any act or transaction in violation of subsections (a), (b), or (c) of this section, shall be liable to any person who shall purchase or sell any security at a price which was affected by such act or transaction, and the person so injured may sue in law or in equity in any court of competent jurisdiction to recover the damages sustained as a result of any such act or transaction. In any such suit the court may, in its discretion, require an undertaking for the payment of the costs of such suit, and assess reasonable costs, including reasonable attorneys’ fees, against either party litigant. Every person who becomes liable to make any payment under this subsection may recover contribution as in cases of contract from any person who, if joined in the original suit, would have been liable to make the same payment. No action shall be maintained to enforce any liability created under this section, unless brought within one year after the discovery of the facts constituting the violation and within three years after such violation.
**(g) Subsection (a) not applicable to exempted securities** The provisions of subsection (a) shall not apply to an exempted security.
**(h) Foreign currencies and security futures products**
(1) Notwithstanding any other provision of law, the Commission shall have the authority to regulate the trading of any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency (but not, with respect to any of the foregoing, an option on a contract for future delivery other than a security futures product).
(2) Notwithstanding the Commodity Exchange Act [[7 U.S.C. 1](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section1&num=0&edition=prelim) et seq.], the Commission shall have the authority to regulate the trading of any security futures product to the extent provided in the securities laws.
**(i) Limitations on practices that affect market volatility** It shall be unlawful for any person, by the use of the mails or any means or instrumentality of interstate commerce or of any facility of any national securities exchange, to use or employ any act or practice in connection with the purchase or sale of any equity security in contravention of such rules or regulations as the Commission may adopt, consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets—
(1) to prescribe means reasonably designed to prevent manipulation of price levels of the equity securities market or a substantial segment thereof; and
(2) to prohibit or constrain, during periods of extraordinary market volatility, any trading practice in connection with the purchase or sale of equity securities that the Commission determines (A) has previously contributed significantly to extraordinary levels of volatility that have threatened the maintenance of fair and orderly markets; and (B) is reasonably certain to engender such levels of volatility if not prohibited or constrained.
In adopting rules under paragraph (2), the Commission shall, consistent with the purposes of this subsection, minimize the impact on the normal operations of the market and a natural person’s freedom to buy or sell any equity security.
**(j) 11 So in original. Two subsecs. (j) have been enacted. Limitation on Commission authority** The authority of the Commission under this section with respect to security-based swap agreements shall be subject to the restrictions and limitations of [section 78c–1(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78c–1/b&num=0&edition=prelim).
**(j) 1 Regulations relating to security-based swaps** It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange, to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security-based swap, in connection with which such person engages in any fraudulent, deceptive, or manipulative act or practice, makes any fictitious quotation, or engages in any transaction, practice, or course of business which operates as a fraud or deceit upon any person. The Commission shall, for the purposes of this subsection, by rules and regulations define, and prescribe means reasonably designed to prevent, such transactions, acts, practices, and courses of business as are fraudulent, deceptive, or manipulative, and such quotations as are fictitious.
Cross-references
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Federal law — U.S. Code and appendices · legal_authorities
§ 78i. Manipulation of security prices
(a) Transactions relating to purchase or sale of
security
It shall be unlawful for any person, directly or
indirectly, by the use of the mails or any means
or instrumentality of interstate commerce, or of
any facility of any national securities exchange,
or for any member of a national securities ex-
change—
(1) For the purpose of creating a false or
misleading appearance of active trading in any
security other than a government security, or
a false or misleading appearance with respect
to the market for any such security, (A) to ef-
fect any transaction in such security which in-
volves no change in the beneficial ownership
thereof, or (B) to enter an order or orders for
the purchase of such security with the knowl-
edge that an order or orders of substantially
the same size, at substantially the same time,
and at substantially the same price, for the
sale of any such security, has been or will be
entered by or for the same or different parties,
or (C) to enter any order or orders for the sale
of any such security with the knowledge that
an order or orders of substantially the same
size, at substantially the same time, and at
substantially the same price, for the purchase
of such security, has been or will be entered by
or for the same or different parties.
(2) To effect, alone or with 1 or more other
persons, a series of transactions in any secu-
rity registered on a national securities ex-
change, any security not so registered, or in
connection with any security-based swap or
security-based swap agreement with respect to
such security creating actual or apparent ac-
Page 267
TITLE 15—COMMERCE AND TRADE
§ 78i
tive trading in such security, or raising or de-
pressing the price of such security, for
Stored review status: release_metadata_unconfirmed. The source passage cites 7 U.S.C. § 1. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
§ 1. Short title
This chapter may be cited as the ‘‘Commodity
Exchange Act.’’
(Sept. 21, 1922, ch. 369, § 1, 42 Stat. 998; June 15,
1936, ch. 545, § 1, 49 Stat. 1491.)
Editorial Notes
PRIOR PROVISIONS
This chapter superseded act Aug. 24, 1921, ch. 86, 42
Stat. 187, known as ‘‘The Future Trading Act,’’ which
act was declared unconstitutional, at least in part, in
Hill v. Wallace, Ill. 1922, 42 S.Ct. 453, 259 U.S. 44, 66 L.Ed.
822. Section 3 of that act was found unconstitutional as
imposing a penalty in Trusler v. Crooks, Mo. 1926, 46
S.Ct. 165, 269 U.S. 475, 70 L.Ed. 365.
AMENDMENTS
1936—Act June 15, 1936, substituted ‘‘Commodity Ex-
change Act’’ for ‘‘The Grain Futures Act’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1936 AMENDMENT
Act June 15, 1936, ch. 545, § 13, 49 Stat. 1501, provided
that: ‘‘All provisions of this Act [see Tables for classi-
fication] authorizing the registration of futures com-
mission merchants and floor brokers, the fixing of fees
and charges therefor, the promulgation of rules, regula-
tions and orders, and the holding of hearings precedent
to the promulgation of rules, regulations, and orders
shall be effective immediately. All other provisions of
this Act shall take effect ninety days after the enact-
ment of this Act [June 15, 1936].’’
SHORT TITLE OF 2015 AMENDMENT
Pub. L. 114–1, title III, § 301, Jan. 12, 2015, 129 Stat. 28,
provided that: ‘‘This title [amending section 6s of this
title and section 78o–10 of Title 15, Commerce and
Trade, and enacting provisions set out as a note under
section 6s of this title] may be cited as the ‘Business
Risk Mitigation and Price Stabilization Act of 2015’.’’
SHORT TITLE OF 2008 AMENDMENT
Pub. L. 110–234, title XIII, § 13001, May 22, 2008, 122
Stat. 1427, and
Stored review status: historical_2024_not_currentness_verified. The source passage cites 7 U.S.C. § 1. This identifies an authority to review, not proof of applicability.