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In 2008, first suspicions arose that the London Interbank Offered Rate (LIBOR) had been systematically manipulated by financial institutions involved with its fixing; in June 2012, several major international banks officially admitted to this. The regulatory response could not have been stronger: the LIBOR was not just reformed but discontinued altogether.By studying 3-months LIBOR futures, this paper evaluates the consequences four scandal-related events have had on liquidity and volatility in LIBOR markets. The goal is to document the market disruption, or lack thereof, caused by the manipulation and discontinuation and to draw the relevant policy lessons. One finding is that the liquidity outflows necessitated by the discontinuation and the associated volatility increases were confined to a period of a few weeks before the discontinuation, easing potential concerns that market transitions of the scale of LIBOR could only be done at the cost of major and prolonged disruption.

The authors investigate the effects of algorithmic trading and lit/dark fragmentation on US equity market quality. Market quality refers to the efficiency of lower implicit trading costs as well as market integrity, which are addressed here as reduced end-of-day (EOD) trade-based manipulation. A simultaneous equations model of effective spreads, a proxy for algorithmic trading, and EOD manipulation is carefully specified, and the instrumental variables are pretested to confirm exogeneity and strength. They estimate how fragmentation of the lit and dark order flow in NYSE-listed firms pre and post Regulation National Market System (Reg NMS) along with high frequency algorithmic trading (HFT/AT) jointly determine round-trip implicit transaction costs and EOD manipulation. The authors find that lit (dark) market fragmentation lowers (raises) effective spreads, reduces (increases) EOD manipulation, and increases (decreases) HFT/AT once Reg NMS establishes quote discipline. Key Findings ▪ Market efficiency and integrity are co-determined; higher integrity lowers trading costs. ▪ The effects of fragmented order flow and algorithmic trading on trading costs and market integrity were reversed by Regulation National Market System (Reg NMS). ▪ Following Reg NMS, lit fragmentation lowers effective spreads and reduces end-of-day manipulation whereas dark fragmentation raises spreads and increases manipulation.

We explore the relationship between efficiency and fairness around a natural experiment resulting in the delisting of equity‐linked single stock futures on the National Stock Exchange of India. We provide evidence that the presence of a derivative improves the liquidity of the underlying but decreases the degree of fairness—proxied by manipulation likelihood. Our study highlights that a leveraged derivative entices manipulation of the underlying and that typical inhibitors of manipulation, high execution costs, are conducive to successful market abuse.

Even though corporate scandals and bankruptcy in US and Europe and Asia show some certain evidence on weak corporate governance, weak internal control system and weak audit, Global corporate governance forum noted corporate governance has become an issue of worldwide importance. Therefore, this paper chooses a different analytical approach and among its aims is to give some systematic opinions.First, it classifies Eastern Africa representative corporate governance (CG) standards into two (2) groups: Malawi and Kenya latest CG principles covered in group 1 and, group 2, including corporate governance guidelines from EVCA 2005, so-called relative good CGgroup, while it uses ACCA and CFA principles as reference. Second, it , through analysis, shows differences between above set of standards which are and have been used as reference principles for many relevant organizations. Third, it establishes a selected comparative set of standards for Eastern Africa representative corporate governance system in accordance to international standards.Last but not least, this paper covers some ideas and policy suggestions.

This study investigates trade-based manipulations of capital market instruments. The dataset of the study was gathered from 22 cases of manipulation in Borsa Istanbul (BIST) that occurred in the period between 2010 and 2015. We propose a machine learning approach consisting of supervised machine learning classification models to detect trade-based manipulation from the daily data of manipulated stocks. As a result of this study, supervised machine learning techniques are proven to be successful at detecting trade-based manipulations in trading networks based on the measurement methods of accuracy, sensitivity, and F1 score. We found that our proposed model has an F1 score of 91%, 95% sensitivity, and 93% accuracy in market manipulation detection.

The study was conducted to examine the awareness among the investors about equity and currency market. The study was useful to identify the investors’ mentality towards stock market. The researcher could gain knowledge about equity and currency market. As well, it’s also helpful in creating a good relationship with the investors. At the beginning of a business, owners put some effort to finding the finance assets into the business. This creates the shape of the capital on the business liability to a separate entity from its owners. Although, the foreign exchange market is isolated comparing to other than this. Nevertheless market manipulation of central banks by the foreign exchange market has to be mentioned to the nearest ideal perfect completion.

The rapid increases of European Union Allowance (EUA) prices and very high market volatility, resulting mainly from the growing role of speculative entities, can contribute to forming a price bubble. This may cause the market instability and could have a implications on planning future reduction investments by European Union Emissions Trading Scheme (EU ETS) participants. That is why they need some kind of ‘safety valve’, an effective EU ETS instrument, which can be triggered when the situation requires it. The purpose of this paper is to examine whether the current legislative rules of the EU ETS protect against sudden EUA price fluctuation and the risk of formation of a price bubble. This paper tries to assess the potential EUA price bubble and to review of existing instruments within the EU ETS, analysing their efficiency using different assumptions and identify channels of possible other market instruments to efficiently prevent the carbon market instability caused by rising EUA prices and market speculation. We argue that the European Commission (EC) does not currently have an appropriate market instrument to respond to the EUA price fluctuation. Moreover, there are some legislative loopholes in the system, which may encourage market speculators to influence EUA prices, and there is need to introduce better market safeguards.

One of the price manipulation schemes achieved by artificially increasing the trading volume of the target asset, Pump and Dump (P&D) schemes, has a long history in the stock market and is usually considered unlawful. In cryptocurrency markets, however, this scheme has not been well-regulated and uniquely orchestrated through a new type of social media platform such as Telegram. This paper aims to identify the features of P&D organized through Telegram and examine the market resilience to these activities. The regression model will be placed, in a Bayesian hierarchical framework, to clarify variables that contribute to the profitability (i.e., price change) of P&D attempts. It is revealed that the effect of trading volume on profitability significantly differs across each exchange market. Particularly, Yobit and Cryptopia are more sensitive (easily manipulated) to the increase in the trading volume than Binance and Bittrex, while controlling other significant factors, including the timing of the pump (hourly, yearly), the currency, and the Telegram channel. Furthermore, this paper builds a machine learning model to identify the price hike (successful schemes) given information before the pump starts and achieved more than 75% accuracy using tree-based ensemble models. The contribution of this paper is to provide a detailed analysis of P&D schemes using a novel statistical approach, while particularly focusing on the effect of each exchange, therefore provides a better understanding of how the market is manipulated by the crowd of people in social media platforms.

The article is devoted to research of features of legal evaluation of the signs of the acts set forth in article 1853 criminal code. A criminal-legal analysis is carried out, and proposals are made to improve the design of this corpus delicti. Conclusions are drawn that the current version of the criminal law does not take into account the possibilities of transformation of illegal activities of subjects in the conditions of continuous development of the financial market. In this regard, as an additional form of information manipulation, in addition to the deliberate dissemination of false information, should be considered not only active but also passive actions of the person, as well as to exclude the direct dependence of the qualification of an act as a crime against damage, loss caused by an act or benefits received by the infringer.

Share buybacks have been widely used around the world for a long time now. This was once seen as a form of market abuse in the US. A recent Singapore decision suggested that buybacks to counter a short-selling attack may constitute market manipulation although the Court of Appeal affirmed the decision on the basis that the statutory requirements for a buyback were not met. But those requirements have been liberalized over the past 20 to 30 years although a line should be drawn in the sand with the need for a solvency statement. Not being fully proprietary, repurchased shares should not be kept on the balance sheet. The proper purpose rule, which applies to changes of capital should also apply to share repurchases to only allow buybacks when the company has no need for financing taking into account all possible exigencies. The repurchase price should also be the lowest possible as is the case for normal buyers.

Purpose This paper aims to consider “spoofing”, “layering” and “short reports” in the context of market manipulation and, in particular, a recent controversy involving a short-selling attack on a major UK listed company that was considered by the High Court. Design/methodology/approach The very demanding legal and evidential prerequisites and practical difficulties, involved in bringing both criminal and regulatory actions in such cases are identified and discussed, as is the role of the Financial Conduct Authority. Findings These challenges help explain why so few actions of this type are brought. Originality/value This is the first paper to consider the implications of Burford Capital Limited v London Stock Exchange Plc [2020] EWHC 1183 (Comm).

Book review of: 'Market manipulation and insider trading: Regulatory challenges in the United States of America, the European Union, and the United Kingdom', by Ester Herlin-Karnell and Nicholas Ry...

This paper reviews the academic literature that analyzes securities regulation from an economic perspective. It begins by describing the institutional foundations of securities law in the U.S. and distinguishing securities regulation from the private law of contracts, property, and fraud. Section 2 discusses the theoretical literature on mandatory versus voluntary disclosure in securities markets, focusing on information asymmetry and agency problems as justifications for mandatory disclosure. Section 3 surveys empirical work on the efficacy of actual mandatory disclosure rules. The remaining sections describe particular aspects of the U.S. regulatory system, including the regulation of public offerings, publicly-traded companies, trading markets, securities fraud, insider trading, market manipulation, and mutual funds and other collective investment vehicles, and surveys important theoretical and empirical work on each. The paper is intended to offer both institutional background and a summary of key research findings that may provide useful starting points for future research.

The development of trade in securities, derivative financial instruments, currencies, and goods at exchanges and trading platforms requires a protection of these markets against abuses. Russian legislation in this sphere is based on the approaches of the European Union to counteracting market manipulation and unlawful use of insider information. Consequently, a comparative legal analysis of counteracting these abuses in the EU and in Russia presents a considerable research interest. It was in 2003 that the concept of market manipulation was for the first time defined by the EU in its legislative act, and in April 2014 the EU adopted a legislative act in the form of a directive aimed at harmonizing the legislation of member states on criminal liability for market abuse. This harmonization is especially relevant for the EU due to the creation and functioning of a unified market of financial services, where a license obtained in one member state allows financial institutions to work throughout the territory of the EU. Criminal liability for market manipulation was introduced in Russia in 2009, and a year later the corresponding Article was amended by a complex law on counteracting abuses at organized markets. The authors present a detailed criminal law characteristic of the crime under this norm by analyzing its object, material elements, and other constituent elements of the offense with reference to laws and bylaws of positive regulation of the corresponding relations. According to the authors, this crime and criminal actions under the Article on unlawful use of insider information should be differentiated by using the criterion of publically dangerous consequences manifested through a considerable deviation of the prices of supply and demand, or the trade volume, compared to the corresponding level that would have existed without illegal actions. Using the analysis of the first guilty verdict in Russia under Article 185.3 of the Criminal Code of the Russian Federation, the authors distinguish between liability under this article and the articles regulating liability for crimes against property - fraud, appropriation, abuse of trust with some attributes of theft.

This article discusses top core elements of offenses of insiders trading and market manipulation in terms of the different legislation in those areas. The article finds out that, despite attempting...

PurposeThe purpose of this paper is to empirically examine the impact of closing mechanism changes on market quality, investor trading behavior and market manipulation in the Shanghai stock market.Design/methodology/approachA dummy variable is constructed indicating whether the closing mechanism is call auction or continuous auction. Market quality is measured from aspects of liquidity, volatility and price continuity; investor trading behavior is scaled by order timing and order aggressiveness, and a price deviation indicator is the proxy of manipulation. Using panel regression, this study examines the impact of closing mechanism changes based on intraday transaction data from the Shanghai stock market.FindingsThe conclusions are as follows: First, market quality improves after the closing mechanism is reformed in terms of liquidity, volatility and price continuity. Second, order strategy changes significantly in the closing call market, and investors trade more aggressively in the continuous trading period before closing. Third, the closing call mechanism restrains the closing price manipulation and thus prompts an efficient closing price.Originality/valueThis paper examines the policy effects of closing mechanism changes from aspects of market quality, trading behavior and price manipulation, providing pieces of evidence for trading mechanism design and market supervision in emerging markets.

A statement by ACCA in May 2009 that any corporate governance system should consider factors such as transparency, accountability, fairness and responsibility, raises issues in this field over past few years. There are also a few researches which have been done in the field of international corporate governance standards. This paper chooses a different analytical approach and among its aims is to give some certain systematic conclusions. First, it separates international standards into groups: ICGN and OECD latest principles covered in group 1 while it uses ACCA principles as reference. Second, it identified differences between these above set of standards which are and have been used as reference principles for many countries and organizations. Third, it aims to build a selected comparative set of standards for corporate governance system in accordance to international standards. Last but not least, this paper illustrates some ideas and policy suggestions.

We find evidence consistent with previously unrecognized market manipulation by broker-dealers. Specifically, we show that pre-trade hedging, which is distinct from front-running, alters prices at which derivative trades occur. We show this behavior is intentional by exploiting variation in the design of structured equity products (SEPs). We find positive abnormal returns on SEP pricing dates for which issuers benefit from altering closing stock prices but no such returns on pricing dates of otherwise similar SEPs. We also show that large buy trades near the close of trading are more frequent when SEP issuers have incentives to alter closing stock prices.

Purpose The purpose of this paper is to analyze a data set from a brokerage firm to find possible spoofing cases in ten stocks from the Ibovespa index. The studies proposed concerned the parameters used in the search for the practice, the frequency of occurrences during the negotiation period, the impact on the price caused by the size of the spoofing order and the correlation between the stock's liquidity and the number of occurrences. Design/methodology/approach By using intraday orders flows, the authors are able to reassemble the order book and perform an analysis of potential market manipulation. Findings The authors found six possible cases, all of them happened in the beginning or end of the negotiation period, confirming that there is a window of opportunity for the practice when there is greater uncertainty related to the stock's price. Moreover, they found that in the less liquid stocks, it was necessary to place greater spoofing orders aiming to narrow the wider spread. Practical implications A methodology for spoofing detection that can be replicated by brokerage firms and other researchers was developed. Social implications The study contributes to the literature of capital market regulation by suggesting best practices for regulators and self-regulatory entities to avoid a predatory market practice. Originality/value The authors present an algorithm and parameters for detecting spoofing; other papers are not practical orientated.

Recent empirical studies suggest that, during times of unexpected innovation, agents heterogeneously update their beliefs about an asset fundamental value and are uncertain of other agents' beliefs about it. In this paper I show that, when there is uncertainty over the market sentiment – defined as other investors' beliefs about an asset fundamental value – market manipulation can act through a previously unconsidered channel, by misleading agents' learning on the market sentiment. This novel type of market manipulation could strengthen existing financial bubbles, or even give rise to new ones.

Call auction sessions are widely adopted to improve the price discovery process. The suspension of the closing call auction session (CAS) of the Hong Kong Stock Exchange (HKEx) in 2009 and the reintroduction of an enhanced CAS in 2016 provide us a unique experimental environment to assess the effectiveness of the two different CAS models in reducing market manipulation. In examining the probability of mandatory call events (MCEs) of callable bull/bear contracts (CBBCs), we find the enhanced CAS model being more effective in price manipulation reduction. We also find the enhanced CAS reducing price manipulation in the preopening auction session.

Οι χρηματοπιστωτικές αγορές είθισται να καθοδηγούνται από τη διαθέσιμη πληροφορία που κατέχουν οι επενδυτές. Εάν οι αγορές ήταν απολύτως αποτελεσματικές, οι επενδυτές δεν θα είχαν κίνητρο να ξοδεύουν χρήματα ή χρόνο για να συλλέξουν πληροφορίες για τα χρηματοοικονομικά προϊόντα, διότι σε αυτή την περίπτωση οι πληροφορίες θα αποτυπώνονταν άμεσα στις τιμές. Επομένως, οι επενδυτές από τη μεριά τους αναζητούν πληροφορίες που θα τους δώσουν ένα ανταγωνιστικό πλεονέκτημα έναντι των υπόλοιπων επενδυτών και θα τους οδηγήσει σε επενδυτικές αποφάσεις με υψηλότερες αποδόσεις. Από την άλλη μεριά, οι νομοθέτες καλούνται να παρακολουθούν τις αγορές και να δημιουργούν ένα κατάλληλο επενδυτικό περιβάλλον περιορίζοντας τις συνέπειες της ασύμμετρης πληροφόρησης.Αυτή η διατριβή αποτελείται από δύο ξεχωριστά δοκίμια που εξετάζουν διαφορετικές επενδυτικές στρατηγικές βασισμένες σε διαφορετικές διαδικασίες λήψης αποφάσεων. Το πρώτο δοκίμιο επικεντρώνεται σε στρατηγικές επαγγελματιών και εξειδικευμένων επενδυτών, όπως οι εταιρίες αντιστάθμισης κινδύνου (hedge funds). Έχει παρατηρηθεί ότι μικροεπενδυτές προσπαθούν να μιμηθούν τις στρατηγικές των hedge funds εκμεταλλευόμενοι την εις βάθος επαγγελματική ανάλυση τους στις εταιρίες που συμμετέχουν. Μία διαδεδομένη στρατηγική που είναι αντικείμενο μίμησης είναι ο επενδυτικός ακτιβισμός, λόγω των υποχρεώσεων που επιβάλλει η Επιτροπή Κεφαλαιαγοράς των Η.Π.Α. στους μετόχους σχετικά με την άμεση, εντός δέκα ημερών, ενημέρωση των επενδυτών σχετικά με τις προθέσεις τους στην εταιρία-στόχο. Οι ακτιβιστικές παρεμβάσεις διακρίνονται σε ενεργητικές και παθητικές. Οι ενεργητικές παρεμβάσεις αφορούν νέους μετόχους που κατέχουν τουλάχιστον 5% των μετοχών σε μία εταιρία και προτίθενται να ενασχοληθούν με τα εσωτερικά της εταιρίας. Αντίστοιχα, στις παθητικές παρεμβάσεις οι νέοι μέτοχοι δεν έχουν πρόθεση να παρέμβουν στην εταιρία-στόχο. Στο συγκεκριμένο δοκίμιο εξετάζουμε και συγκρίνουμε τις ενεργητικές με τις παθητικές παρεμβάσεις τόσο βραχυπρόθεσμα όσο και μακροπρόθεσμα. Στη συνέχεια, απομονώνουμε μόνο ένα τις ενεργές παρεμβάσειςκαι διαιρούμε το δείγμα σε φωνητικές (voice) και μη φωνητικές (non-voice) βάση συγκεκριμένων σχεδίων ή προτάσεων που δημοσιοποιήθηκαν από το hedge fund κατά τη διάρκεια της παρέμβασης. Στη συνέχεια καταγράφουμε τις κρίσιμες ημερομηνίες τις οποίες εξετάζουμε αναλυτικά. Σύμφωνα με τα αποτελέσματά μας δημιουργείται αξία γύρω από τις κρίσιμες ημερομηνίες και αποδεικνύεται ότι υπάρχουν τουλάχιστον δύο ημερομηνίες εκτός της αρχικής καταχώρησης, η "απαιτούμενη ημερομηνία" (required date) και η "ημερομηνία φωνής" (voice date), που οδηγούν σε θετικές βραχυπρόθεσμες μη κανονικές αποδόσεις. Ωστόσο, παρόλο που ο ακτιβισμός παράγει μακροπρόθεσμη αξία, δεν υπάρχει καμία ένδειξη ότι το “voice” δημιουργεί μακροχρόνιες μη κανονικές αποδόσεις.Γενικότερα, αποδεικνύουμε ότι η αγορά ανταποκρίνεται θετικά στην είδηση μίας ακτιβιστικής παρέμβασης από hedge funds. Επιπλέον, φαίνεται ότι υπάρχει διαρροή πληροφορίας προς μία μερίδα επενδυτών πριν την αρχική καταχώρηση στην βάση δεδομένων της Επιτροπή Κεφαλαιαγοράς των Η.Π.Α. Το τελευταίο αποτελεί πρόκληση για τους νομοθέτες καθώς η διαρροή πληροφορίας παρατηρείται μόνο στις ενεργές παρεμβάσεις.Το δεύτερο δοκίμιο επικεντρώνεται στους μικροεπενδυτές και στη διαδικασία λήψης αποφάσεων για συμμετοχή σε επενδύσεις υψηλού κινδύνου όπως είναι η συμμετοχική χρηματοδότηση (crowdfunding) και συγκεκριμένα με τον δανεισμό (p2p lending). Το crowdfunding αποτελεί ένα ταχύτατα αναπτυσσόμενο εναλλακτικό εργαλείο χρηματοδότησης στην Ευρώπη. Στο δοκίμιο μας εξετάζουμε την αντίληψη των χρηστών πλατφορμών crowdfunding μέσω ενός ερωτηματολογίου. Το ερωτηματολόγιο επικεντρώνεται στα κίνητρα και τα ρίσκα που είναι πρόθυμοι να αναλάβουν οι επενδυτές και πως αυτοί οι παράγοντες επηρεάζουν την εκτός συνόρων επενδυτική τους δραστηριότητα. Στην Ευρώπη, λόγω της απουσίας ενιαίου θεσμικού πλαισίου, οι εκτός συνόρων επενδύσεις είναι σχεδόν ανύπαρκτες. Πρόσφατα, η Ευρωπαϊκή Ένωση ανέλαβε πρωτοβουλίες σχετικά με την δημιουργία ενός κοινού θεσμικού πλαισίου που θα υπερισχύει των εγχώριων νομοθεσιών με σκοπό την δημιουργία μίας κοινής αγοράς στην Ε.Ε. Μέχρι σήμερα η πλειονότητα των συναλλαγών μέσω συμμετοχικής χρηματοδότησης με δανεισμό πραγματοποιείται στο Ηνωμένο Βασίλειο, όπου η συμμετοχική χρηματοδότηση ρυθμίζεται από την Αρχή Χρηματοοικονομικής Συμπεριφοράς (FCA). Για τον λόγο αυτό, διαιρέσαμε το δείγμα μας σε ερωτηθέντες του Ηνωμένου Βασιλείου και ερωτηθέντες εκτός Ηνωμένου Βασιλείου. Το βασικό εύρημα από αυτό το δοκίμιο είναι ότι οι Βρετανοί ερωτηθέντες οδηγούνται από υψηλότερες αποδόσεις και λιγότερο από ενδιαφέρον για το έργο. Ένα άλλο σημαντικό συμπέρασμα είναι ότι όλοι οι κίνδυνοι βαθμολογούνται χαμηλότερα στην περίπτωση των ερωτηθέντων από το Ηνωμένο Βασίλειο, μια ισχυρή ένδειξη υψηλότερων επιπέδων εμπιστοσύνης σε ολόκληρο τον κλάδο στο Ηνωμένο Βασίλειο. Όσον αφορά τη διασυνοριακή δραστηριότητα, φαίνεται ότι οι διασυνοριακές επενδύσεις συνδέονται με την επένδυση σε μια ξένη πλατφόρμα παρά με την επένδυση σε ένα ξένο έργο σε μια εγχώρια πλατφόρμα. Ένα άλλο ενδιαφέρον εύρημα είναι ότι οι ερωτηθέντες εκτός του Ηνωμένου Βασιλείου είναι πιθανότερο να επενδύσουν στο εξωτερικό σε σύγκριση με τους ερωτηθέντες του Ηνωμένου Βασιλείου που δείχνει την ανάγκη για χρηματοδότηση πιο ισχυρών και ενδιαφερουσών έργων.Η άνοδος της εναλλακτικής χρηματοδότησης κατά τη διάρκεια της χρηματοπιστωτικής κρίσης πρόσφερε στους συμμετέχοντες στην αγορά ποικίλες επενδυτικές ευκαιρίες. Ωστόσο, η έλλειψη ενός κοινού ευρωπαϊκού πλαισίου θέτει περιορισμούς στην περαιτέρω ανάπτυξη. Τα αποτελέσματά μας υποδηλώνουν την ανάγκη μιας καλά σχεδιασμένης ρύθμισης από την Ευρωπαϊκή Ένωση, η οποία θα υποστήριζε την εμπιστοσύνη των συμμετεχόντων και θα ελαχιστοποιούσε τις παραβιάσεις της αγοράς, τις παρανοήσεις και την κακή διαχείριση στο πλαίσιο της βιομηχανίας.

The paper [1] contains two mistakes. We are grateful to Man Kit Tsui for his questions and remarks, leading us to identify them.

The landscape of electronic marketplaces has been monopolized by a handful of market operators that have accumulated tremendous power during the last decades. This trend raises concerns about fairness and market manipulation by these operators acting as gatekeepers. These concerns have recently been outlined in the EU Digital Markets Act (DMA). In this work, we highlight how technological logic of separation understood in the framework of decentralization can address manipulation concerns. As a first step, we devise a reference model of electronic marketplaces, containing six functional components, and outline how control over these components enables different manipulative practices by gatekeepers. We identify two dimensions of decentralization that can counterbalance monopolistic abuse of marketplace components. We then present a software implementation of our reference model and demonstrate how decentralization and unbundling of market components can alleviate manipulation and fairness concerns. We end our work with a review of related approaches and conclude that modular and interoperable marketplaces can enable an open ecosystem of fair electronic markets envisioned by the DMA.

У статті порушено актуальне питання щодо необхідності створення правових механіз­мів протидії маніпулюванню на ринках торгівлі, висвітлено та проаналізовано міжнародний досвід протидії таким діям, а також з'ясовано ознаки маніпулювання. Сформовано пропози­ції щодо вдосконалення законодавства у сфері забезпечення фінансової безпеки держави.

We investigate the relative roles of limit orders from proprietary algorithmic traders (PAT), agency algorithmic traders (AAT) and non-algorithmic traders (NAT) in the discovery of security prices in National Stock Exchange (NSE) of India. Our results suggest that PAT’s limit orders are most informative, however, AAT and NAT still contribute substantially to price discovery. Contrary to popular belief that algorithmic traders are only interested in large stocks, we find that two algorithmic trading groups together contribute nearly 30%–40% of the price discovery in both small and medium capitalization stocks whereas their combined share of trading volume only ranges between 10%–15% in these stocks. We see that price discovery contribution of PAT’s limit orders increase when we conduct our analysis at longer time gaps. This finding is evidence against the popular notion that HFTs only make prices informative in the very short run. We also find that LOB imbalance of PAT is most informative among three groups of traders and find no evidence to support the popular notion that fast traders often use limit orders to “spoof” market participants about future price movements. However, much of the informativeness of PAT LOB imbalance withers away when PAT places orders opposite to rest of the market suggesting that rather than generating information PAT possibly uses information produced by others.

This paper uses the current proceedings against Volkswagen Aktiengesellschaft for violations of its continuous disclosure obligation as a backdrop for addressing fundamental questions of European market abuse law. Specifically, we ask how the Market Abuse Directive and Regulation (MAD/R) and Member State corporate law together shape management’s disclosure policy vis-à-vis the stock market. Taking the perspective of German stock corporation law, our main findings are twofold: First, while European market abuse law severely limits management’s discretion when market integrity is at stake, Member States can still largely control its influence on internal corporate governance – i.e., on the distribution of information between management and shareholders. Second, MAD and MAR directly draw on conceptions of public interest in Member State law when determining the outer bounds of issuers’ ability to delay disclosure, thereby potentially promoting compliance. Based on these insights, the paper then closes with a note of caution for national legislators and suggests a more profound discussion of their responsibility for the optimal functioning of European market abuse law.

Purpose To analyze the evolution of market manipulation and fraud by short-sellers and online bloggers and mechanisms available for addressing and remediating the damage caused by such fraud, including recent activity by the US Securities and Exchange Commission (the “SEC” or “Commission”). Design/methodology/approach This article discusses the development of a modern market manipulation and fraud scheme – the “short and distort” – including a review of potential claims by the targeted companies and anticipated impediments to asserting such claims.It further examines the need for regulation and the possibility that the SEC has opened the door for civil claims for this type of fraud. Findings Companies wrongfully targeted by illegitimate short-sellers may pursue claims for securities violations, defamation, business interference, securities fraud and extortion, among other claims.However, each of these claims has had, and still has, both business and legal challenges, as the short-seller’s initial defense tends to be to attempt to prove the truth of their statements to the market or establish those statements as legitimate opinion.The SEC has made the pursuit easier but there is still a long way to go. Originality/value This article contains valuable information about recent SEC enforcement activity and practical guidance from experienced securities lawyers.

Iceland was hit hard by the financial crisis in 2008. This article discusses the criminal case law handed down in Iceland following the collapse of the Icelandic banks in October 2008. As a result of the banking failure, important legislative measures were taken. A new office of a Special Prosecutor was established by law to deal with potential economic crimes committed during the years leading up to the collapse. The extreme nature of the banking failure paved the way for criminal proceedings. Moreover, as the banks had collapsed, they were not bailed out by the State. Rather, new banks were established under new management. This facilitated investigation. Three main categories of criminal behaviour have led to charges: insider fraud, market manipulation, and criminal breach of trust. The Supreme Court has pointed out that although the information might not, on its own, be held to make a significant difference for a reasonable investor, it may, when put in the context of a mosaic of other information, be deemed to have a significant impact on the share price. Market manipulation mostly concerned systematic manipulation of the share price of each of the banks, rather than a single event of manipulation. Reckless lending can be classified as criminal breach of trust. Criminal breach of trust was often the result of market manipulation, as banksʼ funds were put at enormous risk in order to finance the purchase of their own shares by lending to borrowers whose only substantial asset was often these same shares.

Financial technology (FinTech) based trading activities operate above and underground. Due to their nature, FinTech products can be used within the dedicated regulatory framework or into the deep layers of the Internet. This feature of FinTech alone could potentially undermine the existing financial services regulation (FSR), the aim of which is to ensure financial stability through investor protection measures and measures protecting the integrity of the financial market. To this end, much of the illegal activities on the Dark Web have an interconnected and cross-sectorial impact on the FSR’s aims—for example, the on-going problem with stealing of personal data has implications on investor protection, often via market manipulation channels. Such considerations make it relevant to analyse the ways FinTech used on the Dark Web could affect traditional and FinTech activities in the financial sector. How strong this impact could be would probably depend on how ubiquitous FinTech innovations are on the Deep or Dark Web. This article will argue that by definition their market presence is not only across the entire Internet, but also very high in volume. This is all the more the case because FinTechs brainchild, the cryptos, have become the go to currency for many activities outside the law.

In this research, we have endeavored to ascertain how the Merger & Acquisition firms effect the Pakistani stock market (PSX) during all stages of bubble periods. The regression results of “transaction multiples” and “inverse transaction multiples” show that the trading of the securities of Merger & Acquisition firms has increased in all stages of bubble periods less crash period where they decreased. The regression results have also revealed that Pakistani investors in the stock market carry a “weak financial knowledge & financial risk distress management” & they prefer market manipulation for discounting & therefore, they are adversely hit market manipulations in the stock exchange while trading securities. Resultantly, managerial incentives, as well as cost of capital of Merger & Acquisition firms, stand increased with the help of relevance of accounting, Earnings manipulation & by exercise Investing Activities.

This paper mainly analyzes principles and standards of some international and North European corporate governance frameworks which are issued during or after the global crisis.First, it looks at the United Nation Good corporate governance practices and analyzes its strengths and impacts on corporate governance model of a company.Second, it compared the UN standards to generally accepted governance standards of Sovereign Wealth Funds. The paper finds out that during the global crisis time 207-2008, despite taking care of risk management, there still lacks of certain governance standards in these 2 Codes. Then, it analyzes some relative good corporate governance standards in a few North European countries including: Norway and Finland.Third, this paper provides with a short summary of evaluation of these above 2 corporate governance principles in 2 groups which can enable corporations tocompare to their current codes.Last but not least, it aims to realize a limited general set of standards of corporate governance and give proper recommendations to relevant governments and organizations. Additionally, it includes a section for recommending corporate governance for developing countries including Viet Nam.

There are requirements in Russian law to the behavior of suppliers. If some actions do not meet the requirements, the anti-monopoly authority will punish the supplier. There are different viewpoints on what behavior should be considered as well-founded. The paper considers approaches that aim to assess the behavior of power supplier from the viewpoint of a perfect competition market participant and from the viewpoint of cost recovery. The study indicates that different approaches to assess the behavior of capacity suppliers provide different results and supply curves. Capacity market in Russia requires bidding separately for each generating unit and it corresponds neither with the perfect competition model nor with dispositions of the Federal law "On competition protection", if the supplier operates more than one generating unit. Current requirements to conduct of capacity suppliers pose risk on them and do not correspond with efficient market from the viewpoint of industrial organization theory. It is suggested to change the bidding rules and conduct criteria - instead of unit-based bidding apply bidding by power plants and do not apply the criterion "monopolistically low price" to capacity supplier bids.

Market manipulation is one of the important issues that draw much attention from academia and industry. Many efforts have been made to detect manipulation in stock market. However, with the development of technology, the means of manipulation become more and more diversified and the effective detection methods remain to be an open problem. Here, we develop a generalized method for colluded traders detection based on transaction data. We investigate the clique of trading network, and find the number and weight of clique are greater in manipulated stocks than that in non-manipulated stocks. We further propose a method to detect colluded traders based on weight of cliques. Results demonstrate that our method is effective at distinguishing the manipulated stocks and the colluded traders.

With the rapid development of China’s social economy, in order to meet the diverse investment needs and risk tolerance of investors, private equity investment funds have emerged in the market. This paper finds that while private equity funds continue to grow and develop, there are also many problems, such as the weak legal system of private equity funds, market manipulation risks, external environmental risks and regulatory defects. These defects not only infringe the interests of investors. It will also disrupt the stability of the entire capital market. This article will make some suggestions based on the fund itself, the formulation of laws and the behavior of the regulatory authorities, so that the development of private equity funds in China is more in line with the requirements of the market and laws and regulations.

We study the futures valuation and market manipulation implications of reallocating the right to choose the delivery grade from the short to the long futures position and show that the futures price will converge to the price of the most expensive-to-deliver grade asset at delivery. The shifting of the delivery grade option to the long has the potential to mitigate excessive selling of futures contracts in a crisis, thus contributing to price stabilization. However, it may distort the incentives for the longs, leading to large futures and “corner and squeeze” trades to raise the delivery time spot price above the locked-in futures price.

This article aims to analyze the legal protection for investors is related to the practice of market manipulation as regulated in Law Number 8 of 1995 concerning the Capital Market and what forms of legal protection are provided by the Financial Services Authority (OJK), Indonesia Stock Exchange (BEI), KSEI and KPEI as well as the impact of market manipulation and how the accountability will be imposed on the actors.This article uses a normative juridical legal research method. The normative juridical character is carried out by examining secondary data or by the method of literature study of legal materials which are the reference for research, which is focused on examining the application of rules or norms in positive law. The research was carried out by means of a literature study of the laws and regulations related to market manipulation in the capital market sector.The case study in this research is the alleged case of market manipulation conducted by PT Bliss Property Indonesia Tbk (POSA) which occurred on May 10th, 2019, allegedly taking action to manipulate the market so that there are drastic fluctuations in the movement of stock prices out of the ordinary and without accompanied by clear fundamentals of the company, it is suspected that this trade is not fair so that it harms one of the investors

This paper systematically reviews and examines the regulatory perspective of market manipulation in East Asian emerging markets. Keywords such as market manipulation, corporate fraud, market misconduct, financial regulations, corporate governance practices, institutional quality, and enforcement system for a search in the prominent academic literature databases are used. The studies related to the market misconduct and regulatory overview tied with these keywords are identified and selected for the systematic review. The review of extant literature suggests that the regulators are playing an important role in regulating the market to prevent market manipulation and market misconduct. The review also suggests that emerging economies are facing the issue of low institutional quality, absence of law enforcement agencies in the enforcement process, and definitional vagueness in relation to market manipulation. However, the findings suggest that enforcement mechanisms against market manipulation may discourage market abuses in both emerging and developed markets. The findings of this research offer some challenges and future directions in case of future market manipulation that potentially affect the market integrity of the firms. Notably, the technological changes in the financial markets often lead to regulatory challenges.

Market manipulation refers to artificial inflation or deflation of the price of a security. Also known as price manipulation or stock manipulation, it involves the literal manipulation of a financial market for personal gain. It means influencing the behavior of the securities with the intent to do so. Market manipulation can be difficult for authorities and market regulators to detect, given that multiple variables affect the price movement of a security. Some of these variables may not even be perfectly quantifiable. However, when detected, market manipulation is met with serious civil liability.

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Scalping is a mixture of price gouging and market manipulation, and in some cases, they can be looked at as being the same thing. These three terms, while having different names, describe the actions taken by a person or group of people in order to make a profit. From these actions, the people and or businesses interested in said product will have to pay a large amount of money to get an item that they were originally unable to obtain when it was released.

The CBOE Volatility Index, known by its ticker symbol VIX, is a popular measure of the market’s expected volatility on the S&P 500 Index, calculated and published by the Chicago Board Options Exchange (CBOE). It is also often referred to as the fear index or the fear gauge. The current VIX index value quotes the expected annualized change in the S&P 500 index over the following 30 days, based on options-based theory and current options-market data. Despite its theoretical foundation in option price theory, CBOE’s Volatility Index is prone to inadvertent and deliberate errors because it is weighted average of out-of-the-money calls and puts which could be illiquid. Many claims of market manipulation have been brought up against VIX in recent years. This paper discusses several approaches to replicate the VIX index as well as VIX futures by using a subset of relevant options as well as neural networks that are trained to automatically learn the underlying formula. Using subset selection approaches on top of the original CBOE methodology, as well as building machine learning and neural network models including Random Forests, Support Vector Machines, feed-forward neural networks, and long short-term memory (LSTM) models, we will show that a small number of options is sufficient to replicate the VIX index. Once we are able to actually replicate the VIX using a small number of S&P options we will be able to exploit potential arbitrage opportunities between the VIX index and its underlying derivatives. The results are supposed to help investors to better understand the options market, and more importantly, to give guidance to the US regulators and CBOE that have been investigating those manipulation claims for several years.

This paper offers a novel perspective on the implications of increasingly autonomous and “black box” algorithms, within the ramification of algorithmic trading, for the integrity of capital markets. Artificial intelligence (AI) and particularly its subfield of machine learning (ML) methods have gained immense popularity among the great public and achieved tremendous success in many real-life applications by leading to vast efficiency gains. In the financial trading domain, ML can augment human capabilities in both price prediction, dynamic portfolio optimization, and other financial decision-making tasks. However, thanks to constant progress in the ML technology, the prospect of increasingly capable and autonomous agents to delegate operational tasks and even decision-making is now beyond mere imagination, thus opening up the possibility for approximating (truly) autonomous trading agents anytime soon. Given these spectacular developments, this paper argues that such autonomous algorithmic traders may involve significant risks to market integrity, independent from their human experts, thanks to self-learning capabilities offered by state-of-the-art and innovative ML methods. Using the proprietary trading industry as a case study, we explore emerging threats to the application of established market abuse laws in the event of algorithmic market abuse, by taking an interdisciplinary stance between financial regulation, law & economics, and computational finance. Specifically, our analysis focuses on two emerging market abuse risks by autonomous algorithms: market manipulation and “tacit” collusion. We explore their likelihood to arise on global capital markets and evaluate related social harm as forms of market failures. With these new risks in mind, this paper questions the adequacy of existing regulatory frameworks and enforcement mechanisms, as well as current legal rules on the governance of algorithmic trading, to cope with increasingly autonomous and ubiquitous algorithmic trading systems. It shows how the “black box” nature of specific ML-powered algorithmic trading strategies can subvert existing market abuse laws, which are based upon traditional liability concepts and tests (such as “intent” and “causation”). In concluding, by addressing the shortcomings of the present legal framework, we develop a number of guiding principles to assist legal and policy reform in the spirit of promoting and safeguarding market integrity and safety.