Also known as: pegging · fixing · stabilizing · peg · fix · stabilize · pegged · fixed · stabilized · currency peg · price fixing · market stabilization
Written by attorneys · grounded in primary & secondary sources — see below
A series of transactions in securities undertaken to maintain or control the market price of a security at a particular level.
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Patrick Phan and Pinnacle Holdings executed coordinated purchases of a thinly traded stock across multiple states to stabilize its price ahead of a secondary offering. The transactions drew regulatory scrutiny because they occurred in interstate commerce. The court applied the constitutional grant of power over commerce among the states and held the conduct subject to federal oversight.
Preston Pratt directed Prism Analytics to maintain a fixed bid price for its shares over an indefinite period tied to an uncertain corporate event. The arrangement lacked a computable end date or measuring life. The court treated the support as an estate-like interest in price control that failed the required duration test.
Pierre Poulin and Paragon Construction agreed to stabilize the price of newly issued bonds for a computable six-month window after the offering. The agreement created a landlord-tenant-style relationship between the issuer and the supporting broker. The court upheld the arrangement because it was limited to a fixed and computable period.
Paul Peterson and Prime Logistics placed successive buy orders intending to confine the trading price of a security within a narrow band. The orders directly resulted in the price remaining inside the intended boundaries. The court found liability because the actor intended the confinement and the market was aware of the resulting restriction.
Philip Powell directed purchases to stabilize the price of shares held by a group of investors identified only as the Powell family. The terms used a group label rather than naming fixed beneficiaries. The court presumed a class gift and required fluctuation in the supported shares unless rebutted by contrary intent.
Penelope Price and Pinnacle Holdings agreed in advance that a breach of a price-stabilization covenant would trigger a liquidated payment calculated from anticipated market harm. The amount reflected proof difficulties and the cost of alternative remedies. The court enforced the clause because it was reasonable and not a penalty.
Lawful stabilization must follow SEC-prescribed procedures under section 9(a)(6). Transactions lacking those procedures and undertaken to create a false appearance of market activity are prohibited.
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The statute reaches any security registered on a national securities exchange when the transactions occur through interstate commerce or exchange facilities.
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A single purchase rarely satisfies the prohibition because the statute targets a series of transactions designed to affect price over time.
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…including those relating to the procedure by which the judge regulated the jury's role on questions of fact, crystallized in a fixed and immutable system. . . . "The more logical conclusion, we think, and the one which both history and the previous decisions here support, is that the Amendment was designed to…