Manipulation of security prices.
Section 26
SEC. 26. Manipulation of security prices. —(a) It shall be unlawful for any person, directly or indirectly— (1) For the purpose of creating a false or misleading appearance of active trading in any security registered on a securities exchange, or a false or misleading appearance with respect to the market for any such security: (i) To effect any transaction in such security which involves no change in the beneficial ownership thereof, or (ii) 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, time and price, for the sale of any such security, has or have been or will be entered by or for the same or different parties, or (iii) 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, time and price for the purchase of any such security, has or have been or will be entered by or for the same or different parties. (2) To effect, alone or with one or more other persons, a series of transactions in securities that (i) raises their price for the purpose of inducing the purchase of a security, whether of the same or a different class, of the same issuer or of a controlling, controlled, or commonly controlled company by others, (ii) depresses their price for the purpose of inducing the sale of a security, whether of the same or a different class, of the same issuer or of a controlling, controlled, or commonly controlled company by others, or (iii) creates active trading, actual or apparent, for the purpose of inducing such a purchase for sale. (3) If a dealer or broker, or other person selling or offering for sale, or purchasing or offering to purchase, the security, to induce the purchase or sale of any security registered on a securities exchange 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 anyone or more persons conducted for the purpose of raising or depressing the price of such security. (4) If a dealer or broker or other person selling or offering for sale or purchasing or offering to purchase the security, to make, regarding any such security registered on a securities exchange, for the purpose of inducing the purchase or sale of such security, 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 he knew or had reasonable ground to believe was so false or misleading. (5) For a consideration received directly or indirectly from a dealer or broker or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security registered on a securities exchange 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 anyone 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 registered in a securities exchange for the purpose of pegging, fixing or stabilizing the price of such security. (b) It shall be unlawful for any person to effect, by the use of any facility of a securities exchange — Any transaction in connection with any security whereby any party to such transaction acquires 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; or Any transaction in connection with any security with relation to which he has, directly or indirectly, any interest in any such put, call, straddle, option or privilege; Any transaction in any security for the account of any person who has reason to believe has, and who actually has, directly or indirectly, any interest in any such put, call, straddle, option or privilege with relation to such security. (c) it shall be unlawful for any member of a securities exchange, directly or indirectly, to endorse or guarantee the performance of any put, put, call, straddle, option or privilege in relation to any security registered on a securities exchange. (d) The terms "put”, “call”, “straddle”, “option” or "privilege" as used in this Section shall not include any registered warrant, right or convertible security. (e)Any person who wilfully participates in any act or transaction in violation of subsection (a), (b) or (c) of this Section shall be liable to any person who shall purchase or sell any security at price which was affected by such act or transaction, and the person so injured may sue in any court of competent jurisdiction to recover the damages sustained as a result of any such act or transaction The court may, in its discretion, require an undertaking for the payment of the costs of any such suit, and assess reasonable costs, including reasonable attorney s fees, against either party litigant. Every person who becomes liable to make 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 two (2) years after the discovery of the facts constituting the violation and within five (5) years after such violation. (f) The provisions of this Section shall apply to an exempted security. (g) The foregoing provisions notwithstanding, the Commission, having due regard to the public interest and the protection of investors, may, by rules and regulations, allow certain acts or transactions that may otherwise be prohibited under Section. (20a)