What is Price Rigging?
How Does Price Rigging Work?
In the stock market, traders with inside information might conspire to work together on trades in order to benefit from the inside information. Likewise, sellers might inflate the price of an asset to realize more profits.
For example, let’s assume that there are four major telecommunications providers in the United States and they all agree not to compete with one another for customers in certain geographic areas of the country. To accomplish this, the group agrees on which of the four providers will "get" each territory by offering the best price or service in that territory. The other three agree not to undercut that provider in that territory. In return, the providers ensured that no other competitors will enter the markets, thereby preserving their profits and territories as a whole.
Why Does Price Rigging Matter?
Price rigging is illegal because it interferes with the natural market forces of supply and demand and harms consumers by inhibiting competition.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.