TC (TRAD3) is investigated for market manipulation, says column; shares fall 22%
O TC (TRAD3) is under investigation for alleged stock quote manipulation. The investigation is being carried out by the Securities and Exchange Commission (CVM) and BSM, both self-regulatory entities of capital markets. The information was revealed by columnist Lauro Jardim, from the newspaper O Globo, this Thursday (30).
It is worth remembering that the research on CT was not officially communicated by either entity.
After the news was published, the TC shares are traded at around R$5.12 on the stock exchange today – a quotation that represents a 22% drop on the intraday.
CT, also known as Traders Clubissued a notice to the market at the CVM after the news was published, claiming “that the news published by the newspaper is not valid”.
“The company has not received any notification from the respective bodies, nor has it been previously contacted by the author for confirmations and/or responses by the TC”, reads the company’s statement.
“The company also reinforces that it values isonomy of information and compliance with the highest standards of corporate governance”, follows the document, signed by the Investor Relations (IR) director of the TC.
The report contacted CVM and BSM to comment on the matter. The CVM claimed that it “follows up and analyzes information and movements within the Brazilian securities market, taking appropriate measures, whenever necessary”, and mentioned that it does not comment on specific cases.
BSM, until the publication of this news, did not respond to the request for a statement.
Amid the imbroglio with official institutions, a video on the subject is also circulating on social networks. The recording talks about the investigation by the CVM.
Understand what the TC is allegedly accused of
The charge of asset price manipulation is known as spoofing, a fraudulent practice that is mainly carried out by large institutional investors with the help of algorithms and high frequency trading.
In other words, Spoofing is a kind of “bluff” that manipulate stock prices on the Stock Exchange.
Big investors use algorithms and other tools to trigger buy and sell orders, pushing asset prices up or down.
In the end, these are artificial offers with no purpose of closing deals; purchase orders with the intention of generating false buying or selling pressure.
This type of practice is adopted so that other investors are influenced and the fraudster can obtain more advantageous prices at the time of purchase or sale.
That is, investigations – such as the one that supposedly targets the TC – are made to identify whether the negotiations made are within the rules or are outside the law, when it comes to market manipulation crime.
TC responds in note
Read the full TC official statement on the case:
“TC Traders Club informs its shareholders and other interested parties that it does not report on investigations by market regulatory bodies. The company did not receive any notification from the respective bodies, nor was it previously contacted by the author for confirmations and/or responses by the TC. The company also reinforces that it values isonomy of information and compliance with the highest standards of corporate governance. Finally, the TC informs that any relevant information will be disclosed to the market immediately, in line with CVM rules and the Novo Mercado Regulation.”