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Article
Publication date: 7 October 2013

Andrew Haynes

The purpose of this article is to determine the burden of proof that is applicable in the range of activities covered by the civil offence of market abuse. It also…

Abstract

Purpose

The purpose of this article is to determine the burden of proof that is applicable in the range of activities covered by the civil offence of market abuse. It also considers the approach adopted in the USA and discusses the extent to which that approach may be worth applying in this country.

Design/methodology/approach

The methodology adopted is a mixture of black letter law in analysing the nature of the burden of proof and the relevant market abuse issues, historical research in examining how the modern law relating to the burden of proof has evolved and comparative research through the consideration given to the US approach.

Findings

The findings are that the burden of proof in market abuse cases is unclear, that the burden may well not be the same in all cases, that clarification is needed on the point and that the approach adopted in the USA offers the advantage of clarity. Therefore, its adoption should be considered.

Practical implications

The main practical implication is that cases are currently being brought without this key issue being properly considered and clarified.

Originality/value

The author can find no other research that has been published in this specific area.

Details

Journal of Financial Crime, vol. 20 no. 4
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 1 January 2006

Carlos Conceicao

This paper aims to explore the key challenges faced by regulators following the implementation of the market abuse directive (MAD) in developing a consistent approach to…

Abstract

Purpose

This paper aims to explore the key challenges faced by regulators following the implementation of the market abuse directive (MAD) in developing a consistent approach to tackling market abuse. The paper seeks to argue that how regulators respond to these challenges will have a significant impact on the success of the key objectives of MAD, which is to foster a cross‐border regime with common standards of market conduct.

Design/methodology/approach

An observation by the author which looks at the areas in which regulators need to develop greater cross‐border co‐operation.

Findings

Suggests that, notwithstanding the introduction of MAD, there are substantial differences in the way European regulators tackle market abuse.

Originality/value

A useful summary of the implications of MAD on European regulators and how they might be addressed.

Details

Journal of Financial Regulation and Compliance, vol. 14 no. 1
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 December 2005

Richard Burger and George Davies

This paper summarises the FSA's enforcement action taken to date under the market abuse regime and considers how the implementation of the Market Abuse Directive (‘MAD’…

Abstract

This paper summarises the FSA's enforcement action taken to date under the market abuse regime and considers how the implementation of the Market Abuse Directive (‘MAD’) will affect the work of city compliance officers. In particular, this paper focuses on the new requirement for the regulated sector to make suspicious transaction reports in respect of market abusive behaviour as well as considering how the newly revamped market abuse regime will sit alongside the criminal offence of insider dealing.

Details

Journal of Financial Regulation and Compliance, vol. 13 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 January 2000

Barry A.K. Rider

There was a time in Britain when even senior representatives of the financial services industry were prepared to be quoted in the press as expressing doubts as to whether…

Abstract

There was a time in Britain when even senior representatives of the financial services industry were prepared to be quoted in the press as expressing doubts as to whether there was anything intrinsically wrong with directors and other corporate insiders taking advantage of their better knowledge about their companies in their own investment dealings. Indeed, some even went so far as to say that this was both proper and natural. True it is that, in Britain or for that much in continental Europe, there are few, even among the groves of academia, that would have advanced the theories justifying insider dealing that Professor Henry Manne so clearly articulated in ‘Insider Trading and the Stock Market’. Nonetheless, in what was then the leading book on the law and practice of the stock market, the authors, a leading Queen's Counsel and an eminent stockbroker, expressed the view in 1972 that a stockbroker who learnt even privileged information should not allow this to operate to the detriment of his client. Having said this, Sir Winston Churchill complained that it was defamatory to assert that advantage had been taken of ‘inside information’ during the so‐called Marconi scandal in 1911, and there are comments in a report to the House of Commons by special commissioners as early as November 1696 roundly criticising promoters of over‐valued stock selling out, in the entrepreneurial fashion eloquently advocated by Professor Manne, on the basis of their privileged knowledge and position. Thus, discussion of the pros and cons of insider dealing, at least in Britain, has tended to be emotional rather than based on economic or even pseudo‐economic analysis of empirical data. Even the surveys that have been conducted on attitudes to the practice would hardly impress a statistician.

Details

Journal of Financial Crime, vol. 7 no. 3
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 1 January 2014

Gary Wilson and Sarah Wilson

Located within growing scholarly interest in linking the global financial crisis with revelations of financial crime, this piece utilises Roman Tomasic's suggestion that…

Abstract

Purpose

Located within growing scholarly interest in linking the global financial crisis with revelations of financial crime, this piece utilises Roman Tomasic's suggestion that the financial crisis has marked something of a turning point in regulatory responses to financial crime worldwide. Tomasic attributes this to changing attitudes towards light-touch regulation and risk assessment, and the demand for existing agencies to be replaced with new tougher authorities. In the UK, this can be illustrated by the imminent replacement of the FSA with the Financial Conduct Authority (FCA). The paper aims to discuss these issues.

Design/methodology/approach

Discussion of the FSA's financial crime fighting activity is an important forecast for the likely directional focus of the FCA in this regard. A focus only on “market abuse” enforcement within this arises on account of the effects for financial systems widely attributed to this activity, with threats to systemic stability being a hallmark of the 2007-2008 financial crisis. This methodology also encourages coherence in focus and management of sources within the article. Market abuse enforcement provides a lens for exploring the FSA's adoption of the philosophy and ethos of “credible deterrence”, and FCA commitment to retain it, and ultimately for applying the hypothesis of the “haphazard pursuit of financial crime” to pre-crisis criminal enforcement relating to financial crime undertaken by the FSA.

Findings

The FSA and FCA appear acutely aware that the financial crisis has marked something of a turning point for the enforcement of financial crime, and for signalling changes in approach, for the reasons explored by Tomasic. Tomasic correctly identifies factors encouraging a range of undesirable practices pre-crisis, and ones signalling tougher and more sustained attention being paid to financial crime henceforth. It is noted that, pre-crisis, the FSA's pursuit of criminal enforcement of market abuse was conscious, comprehensively resourced, well publicised, and actually extensive.

Originality/value

This exploration of the FSA's criminal enforcement of market abuse given the Authority's own perceptions that it was not, and could never be, a “mainstream” criminal prosecutor considers the likely lasting legacy of this determined pursuit, when domestic politics and pan-European policies suggested against this. This is likely to be enormously valuable as the FCA undertakes this task in a domestic arena which is markedly in contrast from this, and where European agendas are pushing in favour of criminal enforcement, with the “more Europe, or less” debate providing a further dimension of interest.

Details

Journal of Financial Crime, vol. 21 no. 1
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 6 November 2018

Andrew Haynes

The purpose of this paper is to provide an analysis of the market abuse regulation to determine whether the general assumption that it has made little difference to the…

Abstract

Purpose

The purpose of this paper is to provide an analysis of the market abuse regulation to determine whether the general assumption that it has made little difference to the pre-existing UK law on market abuse is accurate. In particular, the potential impact on compliance and behaviour in financial services firms and those who potentially receive inside information is considered.

Design/methodology/approach

The methodology adopted is a combination of critical analysis and black letter law utilised to determine the content and potential impact of the market abuse regulation. A process of discovery made more important by the limited assistance given by the European Securities and Markets Authority and the Financial Conduct Authority in terms of the guidance and definitions they have provided.

Findings

The new Regulation has a wider definition of insider dealing than under the previous law, has a wider application in terms of the financial instruments that it applies to, has triggered significant new compliance and disclosure requirements and it also extends the law to new markets.

Research limitations/implications

There are limitations in that the relevant regulatory bodies, ESMA and the FCA have made little effort to clarify how they interpret the new Regulation. This is a serious problem because in the case of the FCA, their view will impact on the approach they will take in future enforcement actions.

Practical implications

This paper provides the first real analysis of the market abuse regulation’s effect and shows that, if carefully analysed in context, it has a significant impact on firms in the financial services sector and those engaged in activities which can put them in receipt of inside information. It will cause an increase in relevant compliance and has significant cost implications for affected firms.

Social implications

This is not really relevant here. There will be necessary changes to compliance procedures.

Originality/value

The originality stems from the fact that there appears to be little else published which has engaged in a sustained analysis of the impact and effect of the EU market abuse regulation on the UK’s financial markets and those other firms who receive inside information.

Details

Journal of Financial Regulation and Compliance, vol. 26 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 20 November 2007

Kyri Evagora and Gerald Licnachan

The growth of the commodities markets and the increasing investment by non‐traditional market participants, such as pension and hedge funds, has come to the attention of…

Abstract

Purpose

The growth of the commodities markets and the increasing investment by non‐traditional market participants, such as pension and hedge funds, has come to the attention of the Financial Services Authority (FSA), which has shown growing concern over the risks and challenges faced by all stakeholders in these markets.

Design/methodology/approach

This is a review paper relying on an analysis of the present situation.

Findings

Recent trends and significant developments in the commodities markets have not gone unnoticed by the UK's financial services watchdog. The FSA has indicated an increased degree of interest in the commodities markets and has signalled a shift in its approach towards regulating them.

Originality/value

The paper raises awareness and highlights issues surrounding financial regulation.

Details

Journal of Financial Regulation and Compliance, vol. 15 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 4 July 2016

Jake Green and Emily Torrens

To provide a practical look at the European Union Market Abuse Regulation (Regulation EU No. 596/2014) (“MAR”) and some of its uncertainties, particularly the issue of its…

Abstract

Purpose

To provide a practical look at the European Union Market Abuse Regulation (Regulation EU No. 596/2014) (“MAR”) and some of its uncertainties, particularly the issue of its wide reaching jurisdictional scope.

Design/methodology/approach

The article takes a three pillar approach covering the following: a brief discursive overview of MAR, consideration of some of its uncertainties and key areas of controversy, and a detailed consideration of the jurisdictional scope of MAR.

Findings

Many questions and considerations about MAR remain, particularly those regarding how the investment recommendations requirements will be met in practice, most notably in respect of sales notes. Further, additional extensive record keeping obligations and prescriptive market soundings procedures are now expected of firms in order to show the legitimacy of their activities. In addition, the geographical scope of MAR is wide and all encompassing. Whilst its market manipulation, improper disclosure and insider dealing provisions must undoubtedly be adhered to worldwide, it remains to be seen how far the conduct requirements included in MAR will be implemented by non EU firms.

Originality/value

Consolidation and detailed consideration of the most common questions being asked in the market by market participants and issuers on The Market Abuse Regulation in the run up to its implementation. Practical guidance from experienced financial regulatory lawyers.

Details

Journal of Investment Compliance, vol. 17 no. 2
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 10 December 2018

Jozica Johanna Kutin, Mike Reid and Roslyn Russell

This paper aims to investigate how economic abuse manifests in young adult relationships from the perspective of practice experts to inform the role of social marketing in…

Abstract

Purpose

This paper aims to investigate how economic abuse manifests in young adult relationships from the perspective of practice experts to inform the role of social marketing in economic abuse prevention. Practitioners were asked for their views on prevention strategies at the individual, relationship, community and societal levels.

Design methodology/approach

Twenty-four experts were interviewed using a semi-structured interview schedule. Thematic analysis was undertaken.

Findings

Experts reported that young adults experienced economic exploitation, adverse economic entanglement and economic control. Young adults’ frame of reference was a challenge for practitioners. Experts believed that more work needed to be done to improve the financial literacy of young adults.

Research limitations/implications

Practitioner views provide one side of the story. A separate study has been established interviewing young adults to explore these issues further.

Practical implications

The authors argue that prevention and intervention strategies need to focus on young adults who are in their critical relationship formation stage. The identified attitudinal factors present a challenge to policy, prevention and service providers.

Originality/value

The authors shift the attention from service engaged women leaving violent relationships to young adults who have not sought assistance from community or domestic violence services. In doing so, they highlight the importance of the relationship formation phase. This paper raises the challenge for social marketers to consider appropriate prevention and intervention programmes for this cohort. Current and future campaigns and programmes need to be designed and evaluated with an economic abuse lens.

Details

Journal of Social Marketing, vol. 9 no. 1
Type: Research Article
ISSN: 2042-6763

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Article
Publication date: 31 July 2007

Richard Burger

The purpose of this study is to consider the case of Sean Pignatelli and consider surrounding commentary on the misuse of market information.

Abstract

Purpose

The purpose of this study is to consider the case of Sean Pignatelli and consider surrounding commentary on the misuse of market information.

Design/methodology/approach

The paper reviews the Financial Services Authority's (FSA) Final Notice and related publications.

Findings

The paper finds that there may be limitations to the use of the market abuse regime and therefore the FSA may consider the greater use of Principles to “punish” those who engage in market misconduct.

Originality/value

This study will be of interest to approved persons, compliance officers and regulatory lawyers.

Details

Journal of Financial Regulation and Compliance, vol. 15 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

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