Not sure how you came to this conclusion. The point is that you can't argue "this is good for the company/shareholders/lender" if you're selectively choosing the winners without mentioning the losers. It's not compelling, especially not to regulators.
The issue is that if you allow manipulation of derivatives, then the markets become totally useless and they reward only the large players who have the resources to make large trades and deals that custom-fit the triggers to their own payoff profiles.
Many of the counterparties in the derivatives market trade against the banks where they do business, in effect meaning that banks would be manipulating their own customers if you allow certain manipulative tactics.
And like it or not, it's an established fact that manipulation in the derivs market is, broadly speaking, illegal.
I don't agree with you. There is a different utility to commodity futures, for example, than to bets on horse races or blackjack games. Derivatives allow tailored hedging of real-world risks. The regulatory stipulations are different, especially for dealers, and there is a far larger opportunity for people with predictive skills in the derivatives market.
> And this wasn’t manipulation, just two parties doing their fiduciary duties.
By this logic, any profit from market manipulation would be justified because it generates a return for investors. Yet the reason these behaviors are prohibited is because they make the market worse for everyone, arguably including the long-run returns of those very same investors. "Is it beneficial to my investors" is a very poor test to answer the question, "is it manipulation?".
Not sure how you came to this conclusion. The point is that you can't argue "this is good for the company/shareholders/lender" if you're selectively choosing the winners without mentioning the losers. It's not compelling, especially not to regulators.
The issue is that if you allow manipulation of derivatives, then the markets become totally useless and they reward only the large players who have the resources to make large trades and deals that custom-fit the triggers to their own payoff profiles.
Many of the counterparties in the derivatives market trade against the banks where they do business, in effect meaning that banks would be manipulating their own customers if you allow certain manipulative tactics.
And like it or not, it's an established fact that manipulation in the derivs market is, broadly speaking, illegal.