Market abuse
Market abuse may arise in circumstances where financial investors have been unreasonably disadvantaged, directly or indirectly, by others who:[1]
- have used information which is not publicly available (insider dealing)
- have distorted the price-setting mechanism of financial instruments
- have disseminated false or misleading information
Market Abuse is split into two different aspects (Under EU definitions):[1]
- Insider dealing: Where a person who has information not available to other investors (e.g. a Director with knowledge of a takeover bid) makes use of that information for personal gain;
- Market manipulation: Where a person knowingly gives out false or misleading information (For instance about a company's financial circumstances) in order to influence the price of a share for personal gain.
In 2013/2014, the EU updated its legislation on market abuse,[2] and harmonised criminal sanctions. In the Danish European Union opt-out referendum, 2015, the Danish population rejected adoption of the 2014 market abuse directive (2014/57/EU) and much other legislation.
See also
References
- 1 2 EU Legislation Summaries: Market abuse
- ↑ Willemijn de Jong (21 January 2013). "Tackling financial market abuse in the EU" (PDF). Retrieved 18 December 2013.
Further reading
- Avgouleas EE The mechanics and regulation of market abuse: A legal and economic analysis (2005)
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