Mixed-Motive/Intent for 'Real' Securities Manipulation

תקציר

Securities manipulation can be made by fictitious trade, usually by using wash sales or matched orders. However, securities manipulation can also be accomplished through "real" transactions. Over the last three decades, courts in U.S. and Israel have tried to provide clear answer to the question – what turns real transactions into market manipulation? And what if a trader has mixed-motive/intent (manipulative and legitimate motive/intent)? Whereas the U.S. courts have unanimously decided that an investor may lawfully be convicted only where his transactions were done with the 'sole intent' to affect the price of securities and not for any 'investment purpose', the Israeli courts have provided contradicting answers. The essay offers a comprehensive research to answer the mix-motive/intent question in the securities context, including a review of definitions that have been suggested to the "real" manipulation, examination of its desirable scope, and analysis of the implementation of the mixed-motive/intent principle in other areas. At the end, the essay recommends to solve the elusive quest by adopting the "but for" (sine qua non) test according to which in a case of "real" transactions, manipulation should be illegal only where it is made but for the trader's manipulative motive.