Market Manipulation and Insider Trading: Regulatory Challenges in the United States of America, the European Union and the United Kingdom PDF
Preview Market Manipulation and Insider Trading: Regulatory Challenges in the United States of America, the European Union and the United Kingdom
MARKET MANIPULATION AND INSIDER TRADING Th e European Union regime for fi ghting market manipulation and insider trading – commonly referred to as market abuse – was signifi cantly reshuffl ed in the wake of the fi nancial crisis of 2007/2008 and new legal instruments to fi ght market abuse were eventually adopted in 2014. In this monograph the authors identify the association between the fi nancial crisis and market abuse, critically consider the legislative, policy and enforcement responses in the European Union, and contrast them with the approaches adopted by the United States of America and the United Kingdom respectively. Th e aft ermath of the fi nancial crisis, ongoing security concerns and increased legislation and policy responses to the fi ght against irregularities and market failures demonstrate that we need to understand, in context, the regulatory responses taken in this area. Specifi cally, the book investigates how the regulatory responses have changed over time since the start of the fi nancial crisis. Market Manipulation and Insider Trading places the fi ght against market abuse in the broader framework of the fi ght against white collar crime and also considers some associated questions in order to better understand the contemporary market abuse regime. Market Manipulation and Insider Trading Regulatory Challenges in the United States of America, the European Union and the United Kingdom Ester Herlin-Karnell and Nicholas Ryder HART PUBLISHING Bloomsbury Publishing Plc Kemp House , Chawley Park, Cumnor Hill, Oxford , OX2 9PH , UK HART PUBLISHING, the Hart/Stag logo, BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc First published in Great Britain 2019 Copyright © Ester Herlin-Karnell and Nicholas Ryder, 2019 Ester Herlin-Karnell and Nicholas Ryder have asserted their right under the Copyright, Designs and Patents Act 1988 to be identifi ed as Authors of this work. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers. All UK Government legislation and other public sector information used in the work is Crown Copyright © . All House of Lords and House of Commons information used in the work is Parliamentary Copyright © . This information is reused under the terms of the Open Government Licence v3.0 ( http://www.nationalarchives.gov.uk/doc/ open-government-licence/version/3 ) except where otherwise stated. All Eur-lex material used in the work is © European Union, http://eur-lex.europa.eu/ , 1998–2019. A catalogue record for this book is available from the British Library. Library of Congress Control Number: 2019944791 ISBN: HB: 978-1-50990-307-8 ePDF: 978-1-50990-308-5 ePub: 978-1-50990-309-2 Typeset by Compuscript Ltd, Shannon Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall To fi nd out more about our authors and books visit w ww.hartpublishing.co.uk . Here you will fi nd extracts, author information, details of forthcoming events and the option to sign up for our newsletters. PREFACE Th is is a joint project, born out of a conference at Bristol Law School, the University of Western England in June 2014, on white-collar crime and the fi nancial crisis, organised by Nicholas. We began a series of discussions on this topic, which has resulted in this book. While much has been written about money laundering and other types of fi nancial crime, a lot less has been said about regulatory strategies to fi ght market manipulation and insider trading, especially from a compara- tive perspective. Our joint expertise in national and EU law on fi nancial crimes, respectively, seemed a good combination. Whilst it is a joint project, Ester has written the chapters on the EU (chapters two and four and the EU part in chapter three) and Nicholas has written the chapters on the UK and the USA (chapters fi ve and six as well as the UK/USA part in chapter three). Chapters one and seven have been co-authored. B oth authors would like to thank Hart Publishing for its support and for believ- ing in this project. Finally, we would also like to thank Charlie Robson at Bristol Law School, Catherine Minahan at Hart and Claire Banyard for their excellent support with revising the manuscript. Last but not least, we would like to thank our families for their love and support. Ester Herlin-Karnell and Nicholas Ryder January 2019 LIST OF ABBREVIATIONS AFSJ Area of Freedom, Security and Justice AIG American Insurance Group AIM A lternative Investment Market AML A nti-Money Laundering BoS Bank of Scotland C A C ourt of Appeal CFR Charter of Fundamental Rights of the EU CFSP Common Foreign and Security Policy CFTC Commodities and Futures Trading Commission CHF Swiss Franc CJA Criminal Justice Act CJEU Court of Justice of the European Union CMA Competition and Markets Authority CoE Council of Europe DoJ Department of Justice (US) DPA deferred prosecution agreement ECHR European Convention on Human Rights ECtHR European Court of Human Rights EIO European Investigation Order EPO European Production Order EPPO European Public Prosecutor ’ s Offi ce ESA European Supervisory Authority ESMA European Securities and Markets Authority ESRB European Systemic Risk Board EURIBOR Euro Interbank Off ered Rate FATF Financial Action Task Force FBI Federal Bureau of Investigation FCA F inancial Conduct Authority FOREX Foreign Exchange Market x List of Abbreviations FSA Financial Services Authority FSMA Financial Services and Markets Act FX Foreign Exchange GDPR General Data Protection Regulation (2016) HMRC H M Revenue and Customs HMT HM Treasury ICAP ICAP Europe Limited IEL/ICAP ICAP Europe Limited ITSA Insider Trading Sanction Act 1984 JPY Japanese Yen LIBOR London Interbank Off ered Rate Lloyds Lloyds Bank plc/Lloyds Banking Group plc/Lloyds TBC MAD Market Abuse Directive MAR Market Abuse Regulation Martins Martin Brokers (UK) Ltd MiFID Markets in Financial Instruments Directive MiFIR M arkets in Financial Instruments Regulation OLAF European Anti-Fraud Offi ce PIF Convention Convention on Protection of the EC ’ s Financial Interests (1995) PIF Directive Directive (EU) 2017/1371 PRA Prudential Regulation Authority R abobank C oö p eratieve Centrale Raiff eisen-Boerenleenbank BA RINGA R elevant Information Not Generally Available SEC Securities and Exchange Commission SFO Serious Fraud Offi ce SLS Special Liquidity Scheme TEU Treaty on European Union TFEU Treaty on the Functioning of the European Union UBS/UBS AG Union Bank of Switzerland UK United Kingdom UN United Nations US United States VAT V alue Added Tax LIST OF STATUTORY PROVISIONS UK Law Financial Services Act 1986 ................................................................................ 127 – 28 Criminal Justice Act 1993 ................................................... 11 , 48 , 80 – 83 , 92 , 102 , 126 Competition Act 1998. .................................................................................................. 89 Financial Services and Markets Act 2000 .................................. 48 , 51 , 60 , 80 – 81 , 83 , 85 – 90 , 92 – 93 , 95 , 102 , 126 Proceeds of Crime Act 2002. ............................................................... 48 , 50 – 51 , 84 , 94 Financial Services Act 2012 .................................................................. 6 , 48 , 83 , 86 – 89 Sanctions and Anti-Money Laundering Act 2018 .................................................. 102 US Law False Claims Act 1863 .......................................................................................... 54 , 115 Securities Exchange Act 1934 .................................................................................... 107 Commodity Futures Trade Commission Act 1974 ............................. 7 , 9 , 12 , 56 – 57 , 103 , 121 – 23 , 128 Racketeer Infl uenced Corruption Organisation Act 1970 .......................... 6 , 53 , 107 Insider Trading and Securities Fraud Enforcement Act of 1988 .................... 105 – 06 Insider Trading Securities Fraud Enforcement Act 1988 ................................ 105 – 06 Financial Institutions Reform, Recovery and Enforcement Act 1989 ........... 57 , 120 Securities Enforcement Remedies and Penny Stock Act 1990 .............................. 107 Sarbanes Oxley Act 2002 ................................................................................... 107 , 111 American Recovery and Reinvestment Act 2009 ........................................................ 5 Dodd Frank Act 2012 ............................................................................................ 5 , 122 European Legislation and Treaties Convention for the Protection on Human Rights and Fundamental Freedoms (European Convention on Human Rights, as amended) (ECHR) ................................................................... 22 , 31 – 32 , 39 – 40 , 42 – 43 , 59 , 77
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