Bidding Ring

  

A group of people working together to keep the prices artificially low (or artificially high, depending on the scenario) by agreeing not to outbid each other. It's a form of collusion that's generally considered fraud.

Say a construction contract is up for bid. You and your buddy are the main competition for the project. But instead of putting in truly competitive bids, you guys get together and decide that you're going to put in the same amount. This way, whichever one of you gets the final bid, that person is going to make more than if the bidding was fair.

In this example, you and your friend are the bidding ring, and what you've just conspired to do is called bid rigging (See: Bid Rigging). We expect you to go to your room and think about what you've hypothetically done.

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Finance: What is Painting The Tape?26 Views

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Finance a la shmoop what is painting the tape?

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all right tape as in ticker tape should be white with black letters and numbers [New York Stock exchange ticker tape appears]

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on it and that's it painting it is clearly a sign that you're painting over

00:16

something or hiding something and in fact painting the tape is an illegal way

00:22

to try and manipulate stock prices in essence it works like this

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Moe and Larry decide that if they show tons of volume

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suddenly traded in a given stock that "somebody will think something's up"

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like a takeover is coming yeah yeah that's the ticket [Moe speaks to Larry]

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Google's buying them for a big price for sure and note that painting the tape is

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actually a common phenomenon in social media since those stocks are ones that

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they talk about where one lonely bitter and angry former postal worker can buy a [Man panting at a computer]

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dozen old used Dell computers to be that social media promulgator and those

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tie differently into the internet with different IP addresses so that remotely

01:05

it looks like they're owned by twelve different people with twelve different

01:09

opinions all coming at you at the same time recommending you buy this stock or

01:14

sell that stock right well that blogger a social media person then posts on a [Social media post of basketball game appears]

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given topic like curling sucks and then their second fake account replies yes of

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course it does curling is for idiots and their third

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account replies, well curling should be banned from the Olympics you see that

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guy's gut and well you get the idea things get incendiary in the stock

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market this way as well so if Moe and Larry trade tons of shares [Moe and Larry throwing shares at each other]

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back and forth and a big spike of volume lots of other institutional investors

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like the big ones may be enticed to buy in and then they drive the stock from

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say twelve bucks a share to eighteen at which point Moe and Larry will get out

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having made a fast tidy and very illegal profit they would have painted the [Moe and Larry celebrate as money falls on them]

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ticker tape to look like there was tons of activity on it

02:03

tons of exciting takeover rumors and other forces to make the stock go up up

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up with lots of demand from investors all over the world when in fact

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there wasn't they were clearly fishing for someone else to come in and bid [Stock on a fishing line appears]

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things up so that they could sell make their dough and move on to some other

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scheme and well here's where that scheme usually ends you up....

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