Damages market integrity refers to the harm caused to the trust, reliability, and fairness of financial markets and institutions. When market integrity is compromised, it can lead to:

1. Erosion of investor confidence: Investors may lose faith in the markets and hesitate to invest, leading to reduced market participation and liquidity.

2. Loss of credibility: Financial institutions and markets may be perceived as corrupt or rigged, damaging their reputation and credibility.

3. Market instability: Unethical behavior and unfair practices can lead to market volatility, flash crashes, and other instability.

4. Reduced market efficiency: When market integrity is compromised, prices may not reflect true market value, leading to inefficient allocation of resources.

5. Increased systemic risk: Damage to market integrity can contribute to systemic risk, threatening the entire financial system.

6. Regulatory scrutiny: Markets and institutions may face increased regulatory oversight, fines, and penalties.

7. Legal and reputational consequences: Individuals and organizations may face legal action, fines, and reputational damage.

Maintaining market integrity is crucial for ensuring the stability, efficiency, and fairness of financial markets, as well as promoting economic growth and investor protection.