Forensic Finance: Market Abuse and Price Manipulation in Security Markets on the Trail

On 19th March 2009, several national newspapers in Austria reported on a “turbo scandal” that had been suspected on the Vienna Stock Exchange for several years. Concerned investors argued that the issuers of turbo certificates tried to raid the underlying prices of these down-and-out call options by selling underlyings with prices under the barriers, resulting in valueless turbos. The goal of this research is to find out which variables are crucial for the research, which stocks were manipulated and who their manipulators were. According to our empirical results, we define suspicious issuers for each stock and classify them as being highly, moderately, less suspicious or rather unsuspicious issuers.