Just curious - does anyone know if this can or cannot occur?
A fund, such as a super fund - have enough stock to manipulate and cover.
A managed fund can have say 100 mil invested in a stock. 50mil from say its members who have a choice and chose said stock to invest in. The other 50 mil, from say a balanced portfolio, that the fund manager can choose to invest in on behalf of its members, who do not have an investment election.
So, the fund decides to dump 50 mil from its managed portfolio to trigger an SP free fall, triggering stop loss and shaking out investors that freak when their investment falls. Now the fund members who have chosen to invest in the said stock that are still invested in the remaining 50 mil, realise their stock is losing value on their SP investment, and they too sell via the fund managers brokers.
The Fund then buys this stock using the funds from its recently sold 50 mil and puts the capital back into the balance fund, but takes its percentage from the gains?
I am only asking, as the above is not my area of expertise. This is of course not really shorting, but is still tree shaking from its own members, which in turn would have ramifications in the shoring space.
I am sure there would be a law that safeguards against this kind of manipulations and I just wanted to know if someone on this forum has the expertise to answer my question?
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