Stock Market Manipulation – US Markets and elsewhere
By The Simplified Resource For Investing and Personal Finance  •  April 29, 2009
Retail brokerage customers generally never learn that they paid money for something that failed to be delivered to their accounts. That is because retail customers’ brokerage account statements do not reveal whether delivery takes place; even when no shares are delivered at settlement, share entitlements are still credited to the buyer’s account. Those credited share entitlements then trade in the market as if they were real shares issued by the company. - WorldAffairsJournal Regulation (Spring 2008)

Huh? What's the above about? It's about the practice of selling shares without owning any shares, also called "Naked Shorting" and then failing to deliver the shares. In the US market, they use the term "Failure to Deliver" to describe it. The consequence of this act is to increase the number of outstanding shares of a company and basic economics of demand and supply states that when the supply increases, price goes down.

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By The Simplified Resource For Investing and Personal Finance
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