Issues of stock price manipulation and solutions for Vietnam's stock market

Abstract

Stock price manipulation is a widespread issue globally, but it becomes particularly acute in emerging markets due to severe information asymmetry. This harmful practice has significant adverse effects on society, the economy, and investors, driven primarily by the pursuit of economic gain. Stocks of small companies with limited liquidity and transparency are particularly vulnerable to manipulation. Although institutional investors may engage in stock price manipulation at times, they also have the potential to enhance transparency and reduce such activities in the market. To identify instances of manipulation, economists have developed advanced models utilizing machine learning, artificial neural networks, support vector machines, and decision trees. In light of previous studies, the author proposes several solutions to curb stock price manipulation in Vietnam. These include raising awareness among investors, providing professional ethics training for employees in the financial industry and government, enhancing market transparency and integration, strengthening supervision, and imposing strict sanctions on individuals and organizations violating securities regulations.