Market abuse may arise in circumstances where financial market investors have been unreasonably disadvantaged, directly or indirectly, by others who:
- have used information which is not publicly available (insider dealing)
- have distorted the price-setting mechanism of financial instruments
- have disseminated false or misleading information
Market Abuse is split into two different aspects (under EU definitions):
- Insider dealing: where a person who has information not available to other investors (for example, a director with knowledge of a takeover bid) makes use of that information for personal gain
- Market manipulation: where a person knowingly gives out false or misleading information (for instance, about a company’s financial circumstances) in order to influence the price of a share for personal gain
In 2013/2014, the EU updated its legislation on market abuse, and harmonised criminal sanctions. In the 2015 Danish European Union opt-out referendum, the Danish population rejected adoption of the 2014 market abuse directive (2014/57/EU) and much other legislation.
- ^ Jump up to:ab EU Legislation Summaries: Market abuse
- ^Willemijn de Jong (21 January 2013). “Tackling financial market abuse in the EU” (PDF). Retrieved 18 December 2013.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.