Daisy Chain Law and Legal Definition

Daisy chain means a series of purchases and sales of the same stock by a small group of securities dealers. It mainly aims to drive up the stock’s price to attract unsuspecting buyer’s interest. When the buyers have invested, the traders will sell the stock for a quick profit, leaving the buyers with overpriced stock. This practice is considered as illegal in the eyes of law. The daisy chain constitutes serious criminal activity and is the type of conduct that Congress sought to prevent when it proscribed money laundering.