Definition
Market manipulation in the tender-offer context covers trading practices intended to artificially raise or lower the price of the target’s (or bidder’s) securities during the offer period to influence tender decisions or move the arbitrage spread. Prohibited under §14(e), §10(b), §9(a), and Rule 14e-5.
Common manipulation patterns
- Painting the tape — creating misleading price action via wash trades
- Pumping — coordinated buying to push the target above the offer price (signaling a sweetened bid)
- Bashing — coordinated selling or short-selling to depress the bidder
- Bidder purchases outside the tender — directly prohibited by Rule 14e-5
Why it matters
Manipulation undermines the all-holders / best-price principle and the integrity of the offer process. SEC enforcement is active in this area; civil and criminal liability both apply.