What is Stock Rigging?

Stock rigging is a phenomenon that attempts to pump up a company's stock price by floating favorable news about the company's earnings or future prospects. It actually encompasses a number of activities rather than just one. So say that if an individual with enough contacts in the markets and resources wants to rig a stock X. he will first spread positive rumors about the stock, such as a huge merger or FDI investment or great future growth numbers etc. Then he would use analysts as a medium to extend positive recommendations about the stock. In the process he would create speculation in the market and the stock price would shoot up. This individual can be a part of a cartel of investors, may be a promoter or some other entity.

This is why you would notice that there are certain stocks which only move on news or at the end of every quarter when strong numbers are posted or a positive guidance is set by the management of the company.