Same rules, different enforcement: Market abuse in Europe

Douglas Cumming, Alexander Peter Groh and Sofia Johan

Journal of International Financial Markets, Institutions and Money, 2018, vol. 54, issue C, 130-151

Abstract: We present and analyze a novel set of enforcement data from the European Securities Market Authority during the period following the European Union’s harmonized rule setting on securities market abuse. The data show significant differences in the intensity of enforcement across Europe. The empirical tests are highly consistent with the view that the intensity of enforcement is the most statistically robust and economically significant predictor of market abuse detection. In particular, the data identify three important arms of enforcement: the number of supervisors, which enhances detection; formalized cooperation, which facilitates surveillance; and imprisonment, which facilitates deterrence. We discuss research, practitioner implications, and policy implications for securities regulation across several key European countries.

Keywords: Securities regulation; Enforcement; Law and finance (search for similar items in EconPapers)
JEL-codes: G12 G14 G18 K22 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (19)

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Working Paper: Same Rules, Different Enforcement: Market Abuse in Europe (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:54:y:2018:i:c:p:130-151

DOI: 10.1016/j.intfin.2018.03.006

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