INSIDER TRADING AND MARKET MANIPULATION
By Janet Austin
ISBN: 978 1 78643 641 2
Edward Elgar Publishing Ltd
TAMING THE CROSS-BORDER CROOKS –
OR HOW TO CURB INSIDER TRADING ON A GLOBAL SCALE
An appreciation by Elizabeth Robson Taylor of Richmond Green Chambers and Phillip Taylor MBE, Head of Chambers
and Reviews Editor, “The Barrister”
Is the taming, shaming and prosecuting of insider traders operating across borders a well-nigh impossible task? This book by Janet Austin, from Edward Elgar Publishing, contains any number of comments on the difficulties and offers an equal number of valuable suggestions on what might be done.
‘Insider trading’ -- a term reasonably well understood by the general public -- does strike a certain degree of terror in the stony hearts of traders in the Square Mile and other well-regulated jurisdictions, as there have been a few of those found guilty who have suffered years of incarceration, a result.
Insider trading, together with market manipulation are basically, in the opinion of author Janet Austin, the twin pillars of market abuse and especially difficult to tackle
when perpetrated across borders. This copiously researched and carefully argued treatise is based on her twenty years as a Federal Prosecutor for the Commonwealth Director of Public Prosecutions in Sydney, Australia.
Now a member of the Faculty of Law at the University of New Brunswick, Canada, the author recalls one specific case where, after twelve months of repeated requests to a particular country for details of who exactly had placed certain insider trades, there was no response. The file subsequently -- and reluctantly -- was closed.
In a global business environment in which securities markets are becoming increasingly interconnected, and where multiple markets are open to investors, situations such as this can, paradoxically, undermine investor confidence, thereby jeopardizing further, the integrity of world securities markets.
With increased capacity for cross-border trade via globalization and new technologies, ‘transactions’, as the author puts it ‘cannot now be easily guaranteed’ and therefore all the more difficult for securities regulators intent on protecting market integrity across jurisdictions.’
A core problem here is that market abuse offences can be dealt with only by national securities regulators. As the possibility of an international regulator with teeth is currently remote to say the least, other strategies must be found.
This book therefore focuses on the work of the International Organization of Securities Commissions (IOSCO) which assists securities regulators in the collecting of evidence needed to aid securities regulators in the prosecution of market offences. Various improvements to these processes can be put in place, which the author is happy to suggest.
To this end, specific cases are cited as examples of how market abuse can be detected, investigated and ultimately prosecuted.
For professionals confronting such problems, this book is an important find, presenting as it does, cogent arguments on a difficult subject, supported by a formidable amount of research. Note the 28 page bibliography and extensive footnoting. Practitioners involved in financial services as well as academics should therefore find this volume indispensable.
The publication date is cited as at 29th December 2017.