Painting the Tape Law and Legal Definition

Painting the tape is an illegal and manipulative practice. It is the practice of simultaneously buying and selling the same security with no true change in beneficial ownership so numerous transactions appear on the ticker tape thereby attracting other buyers or sellers to the security. As other investors cause the price of the security to move, tape painters sell at a profit.

Placing successive, small-amount buy orders in increasing prices to simulate increased demand is called as painting the tape. [SEC v. Competitive Techs., Inc., 2005 U.S. Dist. LEXIS 43349 (D. Conn. July 21, 2005)].