> When the information asymmetry is deliberately created, that's being done in bad faith, and is the sort of thing we call fraud when done on an individual level.
What information asymmetry? The previous comments referred to speculators betting on price movements.
Deliberately creating fraudulent information asymmetry would be altering data in industry reports and publishing false manufacture/consumption data. Which, I assume, is illegal.
What is illegal is financial advising without a license. Which recommending a stock falls under. Altering some one else's report and claiming your rendition is the real one is forgery or something, but writing your own report and making up numbers is totally fine.
By, for example, deliberately delaying delivery while owning a significant segment of the available commodity, such as Goldman Sachs did with aluminum a decade ago. [1], while simultaneously selling derivatives based on the very commodities they were manipulating. To the best of my knowledge, there were no consequences - if anyone knows of a financial penalty or change to law or regulations, please share!
I agree that there is concern of malfeasance in that scenario, but I was under the impression the context of the discussion was solely around the purchase and sale of contracts for the commodities (i.e. betting on the future price of a commodity), not manipulation of the actual supply and demand.
When the same legal entities are in a position to do both (participate in the futures market and manipulate supply and demand) I do not see how or why you would try to make such a distinction.
It feels like you're trying to say, "this market would work fine if it weren't for those meddling bad actors" as a response to "the problem is the bad actors".
What information asymmetry? The previous comments referred to speculators betting on price movements.
Deliberately creating fraudulent information asymmetry would be altering data in industry reports and publishing false manufacture/consumption data. Which, I assume, is illegal.