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Kursmanipulation på finansmarknaden - Om gällande rätt för kursmanipulation och varför marknaden behöver reglering

Norell, Jens LU (2014) HARH10 20141
Department of Business Law
Abstract
This thesis discusses the phenomenon price manipulation, and its legislation. The definition of price manipulation is artificially deflating or inflating the price of a certain financial security. There are a number of ways to manipulate prices, and the consequences are usually tangible.
Legislation in this area is relevant in several aspects. The essay highlights the key legal perspective; maintaining an economically viable market. The center of the legislation revolves around the Market Abuse Directive (MmD) on EU-level, which contains regulations concerning market manipulation. The directive’s principal regulation is reflected in the Swedish act Lag (2005:377) om straff för marknadsmissbruk vid handel med finansiella instrument (MmL).... (More)
This thesis discusses the phenomenon price manipulation, and its legislation. The definition of price manipulation is artificially deflating or inflating the price of a certain financial security. There are a number of ways to manipulate prices, and the consequences are usually tangible.
Legislation in this area is relevant in several aspects. The essay highlights the key legal perspective; maintaining an economically viable market. The center of the legislation revolves around the Market Abuse Directive (MmD) on EU-level, which contains regulations concerning market manipulation. The directive’s principal regulation is reflected in the Swedish act Lag (2005:377) om straff för marknadsmissbruk vid handel med finansiella instrument (MmL). The central paragraph in the act is 8 § corresponding to Article 5 of the MmD.
Trust for the market is of outmost importance for the economy, and for illustrative purposes, I describe and analyze two financial theories, the Efficient Market Hypothesis (EMH) and Akerlof’s Lemon Theory. The EMH deals with how information turns into prices on the market and the different levels of market efficiency at which this phenomenon occurs. Akerlof’s Lemon Theory describes a scenario in which the trust on the market is erased and how the market function is distorted. The danger of price manipulation is shown to mainly be a failing trust for the market, which is why it is important to legislate on what is considered to constitute price manipulation and try to minimize the damage that follows from it.
I’ve analyzed case law by looking at six different cases, which shows how the problem of price manipulation manifests itself in practice. These cases are mainly about self-trade, which occur when the same person tries to manipulate the prices of a security by trading with himself with different depots. (Less)
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author
Norell, Jens LU
supervisor
organization
course
HARH10 20141
year
type
M2 - Bachelor Degree
subject
keywords
Price manipulation, MmD, MmL, Efficient Markey Hypothesis, Akerlof's Lemon Theory
language
Swedish
id
4463142
date added to LUP
2014-06-12 13:34:31
date last changed
2014-06-12 13:34:31
@misc{4463142,
  abstract     = {This thesis discusses the phenomenon price manipulation, and its legislation. The definition of price manipulation is artificially deflating or inflating the price of a certain financial security. There are a number of ways to manipulate prices, and the consequences are usually tangible.
Legislation in this area is relevant in several aspects. The essay highlights the key legal perspective; maintaining an economically viable market. The center of the legislation revolves around the Market Abuse Directive (MmD) on EU-level, which contains regulations concerning market manipulation. The directive’s principal regulation is reflected in the Swedish act Lag (2005:377) om straff för marknadsmissbruk vid handel med finansiella instrument (MmL). The central paragraph in the act is 8 § corresponding to Article 5 of the MmD.
Trust for the market is of outmost importance for the economy, and for illustrative purposes, I describe and analyze two financial theories, the Efficient Market Hypothesis (EMH) and Akerlof’s Lemon Theory. The EMH deals with how information turns into prices on the market and the different levels of market efficiency at which this phenomenon occurs. Akerlof’s Lemon Theory describes a scenario in which the trust on the market is erased and how the market function is distorted. The danger of price manipulation is shown to mainly be a failing trust for the market, which is why it is important to legislate on what is considered to constitute price manipulation and try to minimize the damage that follows from it.
I’ve analyzed case law by looking at six different cases, which shows how the problem of price manipulation manifests itself in practice. These cases are mainly about self-trade, which occur when the same person tries to manipulate the prices of a security by trading with himself with different depots.},
  author       = {Norell, Jens},
  keyword      = {Price manipulation,MmD,MmL,Efficient Markey Hypothesis,Akerlof's Lemon Theory},
  language     = {swe},
  note         = {Student Paper},
  title        = {Kursmanipulation på finansmarknaden - Om gällande rätt för kursmanipulation och varför marknaden behöver reglering},
  year         = {2014},
}