Stock Market Manipulation

Separation of ownership and management creates an agency conflict between the principal and the agent, who manages. This dissertation sheds new light on the ability of market participants to recognize information which is not equally distributed in financial markets. Causes and consequences of shareholder litigation and their role in corporate governance are critically analyzed and newly interpreted. Understanding the conflict between managers and shareholders and be-tween firms and financial intermediaries is important academically and professionally. First, investors learn about effective control of managers. Second, the regulator understands the effects of regulation in financial markets and whether it yields expected benefits. The third group of beneficiaries is the managers themselves. They have to be aware of managerial leeway, the risks that they face and the externalities they impose on financial markets. The last group concerns financial intermediaries and their role in the primary securities market.