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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.

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.

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...

This study is the first attempt to empirically analyse stock market manipulation on the Nigerian Stock Exchange and its consequences on economic performance. The empirical investigation employs a broad data set of 186 actual manipulation cases indicted by the Nigerian Security and Exchange Commission between 2002 and 2016. We embrace market microstructure analysis and the event study method to understand how various manipulation techniques impact on market measures, and the Error Correction Model to evaluate their economic effects. Manipulation is found to distort market efficiency measures (such as market capitalization, value traded ratio and All-Share Index) and genuine traders are forced to exit the market to avoid possible trading with a manipulator. Such huge divestment and the subsequent financial risk weaken the ability of the Stock Exchange market to improve economic performance, creating negative consequences at the post-manipulation period. Essentially, economic variables (such as the GDP) react negatively to manipulative trading. This finding is insightful and a prompt to the Securities and Exchange Commission to design policy responses towards deterring and prosecuting unfair trading practices or other activities that contravene the market rules.

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.

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.

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.

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.

The paper outlines the importance of the securities market for the financing of innovative companies. It summarizes works of foreign and Russian economists, including selected publications on the development of the innovation and investment market of the Moscow Exchange (IIM–MOEX). Both positive and negative implications of the access of innovative companies to public capital markets are identified. The purpose of the research was to investigate the innovation and investment market of the Moscow Exchange and opportunities for individual and institutional investors to obtain tax benefits in this segment. Based on the open data of the Moscow Exchange, the current state of the innovation and investment market has been analyzed. A number of problems have been identified including a limited number of issuers, lack of bonds and investment units, high entry barriers, low liquidity in this segment as well as likely market manipulation and fraud. The prospects for the IIM–MOEX development are outlined. The specifics of the long-term ownership of securities in the innovation sector are analyzed. It is noted that the benefit for long-term ownership of securities of the innovation sector is not popular and faces potential application difficulties. There are few securities eligible for its application (seven shares). The possibility of combining benefits for long-term ownership of the innovation sector securities with individual investment accounts as well as the new corporate bond coupon benefit was substantiated. Arguments are given in favor of the need to consider the benefit for long-term ownership of the innovation sector securities in interrelation with investment tax deductions in general and the benefit for long-term ownership of securities in particular. The areas of further research related to the IIM–MOEX studies and tax benefits for investors in this segment are determined.

Using a large sample of 13,459 initial public offerings (IPOs) from 37 countries, we find that trading rules on market manipulation reduce IPO underpricing. The effect is weaker for IPOs certified by reputable intermediaries, in countries with greater shareholder rights protection, better financial reporting quality, and after the adoption of International Financial Reporting Standards. Better trading rules on market manipulation are also related to higher IPO proceeds, subscription-level, and trading volume, lower IPO listing fees, and better long-term post-IPO performance. Our findings are consistent with the notion that exchange trading rules mitigate information asymmetry problems for investors, resulting in lower IPO underpricing.

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.

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.

Since the start of the Covid-19 pandemic in 2020, retail investors have increasingly participated at higher rates in the U.S. equities markets, particularly in day trading and short-term trading. In January 2021, amid a surge of online postings and interest by retail investors who use free trading apps, GameStop stock began moving up and down by billions of dollars a day—resulting in big gains for some investors and billions in losses for others. To the extent the proliferation of free trading democratizes the market, increases the diversity of participants able to participate in the market, and contributes to vibrant and healthy markets, this activity has positive benefits. These recent developments pose new questions for policymakers, such as whether the ability for users to gather together on social media and move the price of a financial product—for reasons unrelated to market news or market fundamentals—is a larger vulnerability, whether this activity fits into tools to prevent or stop market manipulation or not, and if there is a gap in regulatory ways to address such activity.

Decentralized Finance (DeFi) offers the promise of an emergent alternative financial architecture that prioritizes disintermediation and decentralization to empower individuals along cryptoanarchist principles. Yet it is mired in considerable difficulties including market manipulation, distortionary incentives, excess short-termism, Ponzi-schemes, and money-laundering challenges that also foment a considerable level of dissuasion against DeFi’s wider adoption. This paper critically evaluates many of these important facets at a time when DeFi is emerging as a disintermediated and experimental financial praxis.

In the last decade, there have been many changes in the asset management industry, as this period represented a critical point for the hedge fund industry from the regulatory point of view. The vast literature on the issue suggests that there are three objectives that provide the rationale for financial regulation in general and for hedge fund regulation in particular. These objectives are: (a) protection of investors, (b) promotion of market integrity, but also (c) preservation of financial stability. As we shall see, the above-mentioned aims are connected and overlap, in certain aspects. Consequently, capital flows to hedge funds in various countries are influenced by the strength and the enforcement of investor protection laws in these countries. All the above-mentioned principles are being addressed in the current chapter, in relation to the apparent validity of their application to hedge funds, at a global level. Further on, the chapter makes a clear organization of the different sets of regulation applicable to hedge funds aiming to protect investors, market integrity, and financial system stability. One central idea needs to be apprehended: the hedge fund involvement in market manipulation and insider dealing is clearly unsupported. Hedge funds were not the cause, as they spread systemic risk, but they did not create it.

Who should be held responsible when artificial intelligence (AI) performs market manipulation? In this study, I constructed an AI trader using a genetic algorithm that learns in an artificial market simulation. Then I investigated whether the AI trader discovers market manipulation through learning even though the AI developer had no intention of manipulating the market. Results showed that the AI trader discovered market manipulation as an optimal investment strategy. This suggests that regulation is necessary, such as requiring developers to prevent AIs from performing market manipulation. The results also suggest that developers should limit AI traders to avoid impacting market prices.

The purpose of this study is to assess the importance of carbon raw materials for the economy of the state, in particular - Russia. Governments can rely on oil and gas rents without realizing much more needs to be done. On the other hand, many countries are content with the commodity structure of budget revenues. The authors consider the role and importance of hydrocarbon raw materials for the economy of the country. Russia is currently trying to diversify and modernize its economy, overcoming not only natural obstacles, but also market manipulation and internal resistance. In this study, we will provide facts that should convince a reader interested in finding the truth about Russian impressive achievements over the past decade in the field of recovery, restructuring, diversification and modernization of the oil and gas sector. Knowing that Russia is not economically disabled, as it is constantly portrayed, will help avoid a clash with Russia and move to cooperation. Accurate data will help investors make profits, and politicians will help maintain peace.

A fair level of competition is a fundamental aspect for the functioning of the European energy wholesale market. In this context, the Regulation (EU) No. 1227/2011 on wholesale Energy Market Integrity and Transparency (REMIT) endows the Agency for the Cooperation of Energy Regulators (ACER) and prohibits market manipulation, attempted market manipulation and insider trading. REMIT’s assessment of possible market abuses is organized as an ex-post analysis. This paper proposes a methodology for market abuse monitoring based on the analysis of historical market data tested on 2019 data for the Italian Day Ahead Market and identifies a causal link between the withholding behaviors, an alteration of the electricity market price and the profit of the generators.

The volume of transactions in financial markets is impressive: e.g., every four days an amount similar to the USA GDP flows through the Forex (foreign exchange, which is only one of the several financial markets). Currently, financial markets are ICT-driven, i.e., about 60% of transactions are automatically launched by computers and the annual impact of such transaction is greater than 30 times the world GDP. The growing complexity of financial instruments has led to an increase in the underlying technology, and consequently it opened the door to vulnerabilities in the security and control systems. In this paper we illustrate CyberWolf, a novel attack that exploits a vulnerability of the financial market control system. The aim of the attack is creating the possibility of carrying out transactions of financial products at prices which differ significantly from their real value. In particular, CyberWolf exploits the delay of actions of market makers, who are the entities responsible for regulating the price of the financial instruments exchanged. Interestingly, the attack can be performed against big financial markets and by using a cheap setting; we show the feasibility of our attack against the Italian Stock Exchange (FTSE-MIB) by using only a laptop and a DSL internet connection. We consider the Italian Stock Exchange as a stress-test example for this kind of attack, because it is a liquid financial market (with just a few illiquid instruments) and has an effective regulator. Performing this attack on smaller and / or poorly regulated markets could lead to pathological situations that are not representative of a general case. The purpose of this paper is to highlight the possibility of fraudulent transactions, created by traders who by-pass the control of market regulator.

In the last years, cryptocurrencies are increasingly popular. Even people who are not experts have started to invest in these securities and nowadays cryptocurrency exchanges process transactions for over 100 billion US dollars per month. However, many cryptocurrencies have low liquidity and therefore they are highly prone to market manipulation schemes. In this paper, we perform an in-depth analysis of pump and dump schemes organized by communities over the Internet. We observe how these communities are organized and how they carry out the fraud. Then, we report on two case studies related to pump and dump groups. Lastly, we introduce an approach to detect the fraud in real time that outperforms the current state of the art, so to help investors stay out of the market when a pump and dump scheme is in action., Comment: Accepted for publication at The 29th International Conference on Computer Communications and Networks (ICCCN 2020)

To reduce the possibility of fraudulent activity and market manipulation, the world’s major stock exchanges require every clock involved in a stock market transaction to be synchronized to agree with a common reference clock that keeps accurate and internationally traceable time. This paper describes a distributed system that synchronizes stock market clocks to UTC(NIST), the national time standard for the United States. This system is currently installed at stock market data centers in the United States, the European Union, and Asia, and meets the time synchronization regulatory requirements for all three regions.

A stock market is a large trading environment, capable of handling millions of transactions. It is extremely difficult for regulatory bodies to manually detect whether a transaction was fraudulent or not. With the help of machine learning, it is possible to detect various scenarios of market manipulation. Market manipulation is when traders try to inflate or deflate the price of a stock to their advantage. This paper proposes to identify and detect market manipulation by implementing an Ensemble Neural Network. Our proposed system can identify three types of manipulation scenarios, i.e. Price manipulation, Volume Manipulation, and Trade Reversal. Based on the affidavit information provided by the Securities and Exchange Board of India (SEBI), a daily trading dataset was created from the Bombay Stock Exchange (BSE) website. The Ensemble Neural Network model with and without trainable sub-model layers was implemented on the daily trading dataset. The model with trainable sub-model layers achieved an accuracy of 91% and without trainable submodel layers achieved an accuracy of 96%