Same Rules, Different Enforcement: Market Abuse in Europe

53 Pages Posted: 22 Feb 2014 Last revised: 7 Jun 2016

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Alexander Peter Groh

EMLYON Research Centre for Entrepreneurial Finance; EMLYON Business School

Sofia Johan

Florida Atlantic University - Finance; Tilburg Law and Economics Center (TILEC)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2016

Abstract

We present and analyze a novel set of enforcement data from the European Securities Market Authority during the period following the European Union’s harmonized rule setting on securities market abuse. The data show significant differences in the intensity of enforcement across Europe. The empirical tests are highly consistent with the view that the intensity of enforcement is the most statistically robust and economically significant predictor of market abuse detection. In particular, the data identify three important arms of enforcement: the number of supervisors, which enhances detection; formalized cooperation, which facilitates surveillance; and imprisonment, which facilitates deterrence. We discuss research, practitioner implications, and policy implications for securities regulation across several key European countries.

Keywords: Securities Regulation, Enforcement, Law and Finance

JEL Classification: G12, G14, G18, K22

Suggested Citation

Cumming, Douglas J. and Groh, Alexander Peter and Johan, Sofia A., Same Rules, Different Enforcement: Market Abuse in Europe (March 1, 2016). TILEC Discussion Paper No. 2014-019. Available at SSRN: https://ssrn.com/abstract=2399064 or http://dx.doi.org/10.2139/ssrn.2399064

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Alexander Peter Groh (Contact Author)

EMLYON Research Centre for Entrepreneurial Finance ( email )

23 Avenue Guy de Collongue
Ecully, 69132
France

EMLYON Business School ( email )

23 Avenue Guy de Collongue
Ecully, 69132
France

Sofia A. Johan

Florida Atlantic University - Finance ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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