STOCK MARKET: Beware Manipulation Schemes

Posted on September 10, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd CMP™

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SPONSOR: http://www.MarcinkoAssociates.com

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What are types of market manipulation schemes?

Pump and Dump

Bear Raids

  • Refer to attempts by investors to move the price of a stock opportunistically by selling large numbers of shares short. The investors pocket the difference between the initial price and the new, lower price after this maneuver. This technique is illegal under SEC rules, which stipulate that every short sale must be on an uptick. For more information on this complex tactic, read on in this piece from the Wharton School of Business.

Wash Trading

Matched Orders

  • When fraudsters manipulate the market through matched orders, they enter trades to buy or sell securities with the knowledge that a matching order on the opposite side has been or will be entered. During his tenure at the Commission, our partner Jordan Thomas was involved in a case where the SEC won summary judgement and obtained settlements with an astonishing 16 defendants who engaged in matched trades, among other illicit tactics.

Painting the Tape

  • Painting the tape refers to placing successive orders in small amounts at increasing or decreasing prices.

Spoofing & Layering

  • High frequency traders are known to use the tactics of Spoofing & Layering to manipulate share prices. Spoofing is the placing of a bid or offer with the intent to cancel before execution. Layering is a form of spoofing in which the trader places multiple orders on one side of the book, in order to create a false impression of heavy buying or selling.
  • PONZI: https://medicalexecutivepost.com/2021/09/22/what-exactly-is-a-ponzi-scheme/

Read more about stock manipulation.

For further details about other common securities violations, see our Securities Law Primer.

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RATE REVIEW: The 80/20 Health Insurance Rule

Posted on September 10, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

DEFINITIONS

By Staff Reporters

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Rate Review & the 80/20 Rule

The health care law provides 2 ways to hold insurance companies accountable and help keep your costs down: Rate Review and the 80/20 rule.

Rate Review

Rate Review helps protect you from unreasonable rate increases. Insurance companies must now publicly explain any rate increase of 15% or more before raising your premium. This does not apply to grandfathered plans.

Look up your insurance plan to see its proposed and final rate increase.

80/20 Rule

The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in from premiums on health care costs and quality improvement activities. The other 20% can go to administrative, overhead, and marketing costs.

The 80/20 rule is sometimes known as Medical Loss Ratio, or MLR. If an insurance company uses 80 cents out of every premium dollar to pay for your medical claims and activities that improve the quality of care, the company has a Medical Loss Ratio of 80%.

Insurance companies selling to large groups (usually more than 50 employees) must spend at least 85% of premiums on care and quality improvement.

If your insurance company doesn’t meet these requirements, you’ll get a rebate on part of the premium that you paid.

Medical Accounts Receivable and Collections

Will I get a rebate check from my insurance company?

If your insurance company doesn’t meet its 80/20 targets for the year, you’ll get back some of the premium that you paid.

You may see the rebate in a number of ways:

  • A rebate check in the mail
  • A lump-sum deposit into the same account that was used to pay the premium, if you paid by credit card or debit card
  • A direct reduction in your future premium
  • Your employer may also use one of the above rebate methods, or apply the rebate in a way that benefits employees

If you or your employer will get a rebate, your insurance company must notify you by August 1.

If you have an individual insurance policy, you’ll get the rebate directly from your insurance company.

For small group and large group plans, the rebate is usually paid to the employer. It may use one of the above rebate methods, or apply the rebate in a way that benefits employees.

FYI: The 80/20 rebate rules don’t apply when an insurance company has fewer than 1000 enrollees in a particular state or market.

RETAIL: Sales

Does this apply to my plan?

It depends.

For Rate Review: These requirements don’t apply to grandfathered plans. Check your plan’s materials or ask your employer or your benefits administrator to find out if your health plan is grandfathered.

For the 80/20 Rule: These rights apply to all individual, small group, and large group health plans, whether your plan is grandfathered or not.

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