Market abuse

Market abuse may arise in circumstances where financial 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):

1. Insider dealing: Where a person who has information not available to other investors (e.g. a Director with knowledge of a takeover bid) makes use of that information for personal gain;
2. 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 Danish European Union opt-out referendum, 2015, the Danish population rejected adoption of the 2014 market abuse directive (2014/57/EU) and much other legislation.

See also

• Anti-competitive practices
• Insider trading

Further reading

• Avgouleas EE The mechanics and regulation of market abuse: A legal and economic analysis (2005)