Market Manipulation in Germany – Legal Basis, Consequences and Defence

Market manipulation is a form of market abuse defined by Article 12 of the EU Market Abuse Regulation (MAR). Such conduct aims to create false or misleading signals about supply, demand or the price of a financial instrument (e.g. shares or derivatives), thereby influencing price formation through deception. For tailored advice, contact our English-speaking criminal defence lawyers in Frankfurt or see our criminal defence practice and white collar crime defence.

What Is Market Manipulation?

Market manipulation covers a wide range of unlawful practices intended to steer price movements. A common example is scalping: the actor buys an instrument, publicly recommends it to push the price up, then sells at the higher price to profit from the artificially created increase. For procedural context in investigations, see our overview of German criminal procedure.

Legal Framework (MAR and WpHG)

Article 15 MAR prohibits market manipulation and the attempt to manipulate. In Germany, breaches can lead to:

• • Administrative offences under § 39 WpHG (significant fines and supervisory measures)
• • Criminal liability under § 38(1) WpHG where price influence is caused (fines or imprisonment)

Supervision and enforcement are carried out by the competent authorities; in Germany this includes extensive powers for the regulator (requests for information, searches with prosecutors/police, prohibitions). Our defence team assists at every stage.

Article 12 MAR – Core Types of Market Manipulation

Article 12(1) MAR outlines four principal categories:

• • (a) Trades and orders capable of misleading the market or manipulating prices (not manipulative if justified by legitimate reasons and consistent with accepted market practice)
• • (b) Residual clause capturing other deceptive conduct suitable to manipulate prices
• • (c) Dissemination of information likely to have similar effects as (a); the media privilege in Article 21 MAR protects press freedom but not careless reporting
• • (d) Manipulation of benchmarks (e.g. post-LIBOR reforms)

The structure is market-centred and impact-based: the focus lies on actual or potential effects on price, volume and market signals.

Further Specifications – Article 12(2) MAR

• • Securing a dominant position to set prices
• • Marking the close – trades at the end of the session to influence closing prices
• • Algorithmic strategies used to mislead
• • Scalping explicitly listed as manipulative
• • Activities relating to emission allowances prior to auctions

Article 12(3) refers to Annex I, a non-exhaustive set of indicators for misleading signals. Delegated acts further specify typical practices.

Safe Harbour and Supervision

Article 5 MAR provides a safe harbour for certain share buy-back programmes and stabilisation measures, provided all formal conditions are met. Compliance design and documentation are crucial. For assistance with policies and internal controls, see our pages on compliance and internal investigations.

FAQ: Market Manipulation

What qualifies as market manipulation?
Conduct that creates false or misleading signals about supply, demand or price (Art. 12 MAR), e.g. spoofing/fake orders, misleading information or marking the close. If you are under investigation, review our procedure essentials.

Is attempting to manipulate also prohibited?
Yes. Art. 15 MAR bans manipulation and attempts. Depending on the case, authorities may pursue an administrative offence (§ 39 WpHG) or criminal charges (§ 38(1) WpHG). Engage specialised defence early.

What is “scalping” under MAR?
Buying, publicly recommending to drive demand/price, then selling at profit. Art. 12(2)(d) MAR names scalping as a manipulative practice.

What role does the regulator play?
The regulator has wide powers (information demands, searches with prosecution/police, prohibitions). Practical impact may include dawn raids. Our lawyers provide rapid response.

What sanctions can apply?
• Administrative/OWi: heavy fines, public naming, professional bans.
• Criminal: fines or imprisonment (§ 38(1) WpHG).
Additional asset measures (e.g. confiscation) are possible; strategy is case-specific — coordinate with defence counsel.

Are there exceptions (safe harbour)?
Yes. Art. 5 MAR privileges compliant buy-backs and stabilisation. For governance and controls, speak to our criminal compliance team.

Which examples are listed in Art. 12(2) MAR?
Dominant-position pricing, marking the close, algorithmic strategies, scalping and activities around emission-allowance auctions.

How is lawful market communication distinguished?
Key tests are suitability to mislead and absence of legitimate reasons/accepted market practice. The media privilege (Art. 21 MAR) protects the press but does not replace diligence.

What should I do if I am investigated?
Stay calm, make no statement before file access, and consult a specialist. Tactics depend on evidence, your market role and communication history. See criminal defence and investigation steps.

Can companies be affected?
Yes. Supervisory measures and fines can target companies; reputational impact is significant. An effective compliance system is the best prevention.

Contact Our Criminal Defence Lawyers in Frankfurt and Nationwide

Buchert Jacob Peter defends individuals and companies in market-abuse proceedings and complex capital-markets cases throughout Germany.

• • Dr Caroline Jacob – Specialist Lawyer for Criminal Law
• • Frank M. Peter – Specialist Lawyer for Criminal Law
• • Of Counsel: Prof. Dr Frank Peter Schuster
• • Cooperation Partner: Frank Wehrheim – Tax Advisor and former Tax Investigator

📞 Telephone: +49 69 710 33 330
✉️ Email: kanzlei@dr-buchert.de

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