Financial Market Manipulation and Insider Trading: An International Study of Enforcement Approaches

Journal of Business Law, Issue No. 8, 2017, pp. 652-679

U of Melbourne Legal Studies Research Paper No. 762

27 Pages Posted: 20 Nov 2017 Last revised: 2 Mar 2018

See all articles by Lev Bromberg

Lev Bromberg

The University of Melbourne

George Gilligan

University of Melbourne - Centre for Corporate Law

Ian Ramsay

Melbourne Law School - University of Melbourne

Date Written: November 16, 2017

Abstract

This empirical study applies the authors’ model of enforcement intensity to quantify the severity of sanctions imposed on defendants for market manipulation and insider trading in Australia, Canada (Ontario), Hong Kong, Singapore, and the United Kingdom, providing comparative measures of the relative levels of enforcement intensity in each jurisdiction. The enforcement sanctions studied are custodial sentences, monetary sanctions (both punitive and corrective/restorative) and banning orders. Under the model, the level of enforcement intensity is influenced by both the level of enforcement activity and the severity of the sanctions imposed. The authors find significant differences between the severity of sanctions and levels of enforcement intensity relating to insider trading and market manipulation between the five jurisdictions, which may indicate differences in regulatory enforcement priorities. For example, sanctions for insider trading were more severe than for market manipulation in each of the jurisdictions apart from Singapore. In addition, the stronger enforcement focus in Hong Kong and Singapore is on market manipulation, while in Australia, Ontario and the UK it is on insider trading. The authors’ findings have implications in terms of the ability of the various regulators to create a credible deterrent against insider trading and market manipulation.

Keywords: market manipulation, insider trading, insider dealing, enforcement, securities

Suggested Citation

Bromberg, Lev and Gilligan, George and Ramsay, Ian, Financial Market Manipulation and Insider Trading: An International Study of Enforcement Approaches (November 16, 2017). Journal of Business Law, Issue No. 8, 2017, pp. 652-679; U of Melbourne Legal Studies Research Paper No. 762. Available at SSRN: https://ssrn.com/abstract=3072719

Lev Bromberg

The University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

George Gilligan

University of Melbourne - Centre for Corporate Law ( email )

185 Pelham Street, Carlton, Building 106
Victoria 3010
Australia
+61 3 8344 1079 (Phone)

HOME PAGE: http://www.law-cclsr@unimelb.edu.au

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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