Share ramping

The following Corporate Crime practice note provides comprehensive and up to date legal information covering:

  • Share ramping
  • What is share ramping?
  • Conspiracy to defraud
  • Fraud Act 2006 offences
  • Market manipulation
  • Market abuse
  • Who prosecutes share ramping cases?

Share ramping

What is share ramping?

Share ramping is a form of illegal market abuse that involves talking up the price of particular shares in order to mislead the market. It is also known as 'pump and dump' and 'book ramping'. It can be done in a number of ways but is most commonly done by bringing a company to the market with false expectations of its profitability. Alternatively it can be done by buying shares in a company when they are at a low price and then starting a rumour that the company is being taken over. When the share price rises, the shares are sold at a profit. The internet, chat rooms, emails or other means of communication are utilised to generate a buzz or interest in the market which drives the share price up. Then typically those responsible will dump or off-load their shares for profit leaving ordinary investors with worthless shares. Sometimes it is not about driving the price up but down (a trash and cash scheme), so that the investor profits by short-selling or buying at an artificially low price.

There is no specific criminal offence of share ramping. It can occur in a lot of different scenarios. Criminal offences that can be charged include:

  1. conspiracy to defraud (if two or more people dishonestly conspire to defraud a victim)

  2. one of the

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