Comparative study of disgorgement and disgorgement fund regulations in Indonesia, the USA and the UK

Abstract

PurposeThe purpose of this paper is two-fold: to analyze the legal issues on disgorgement and disgorgement funds in Indonesia, the USA and the UK and to construct the ideal law regarding disgorgement and disgorgement fund.Design/methodology/approachThe type of legal research in this paper is normative legal research. The research approach used is a comparative approach and a legal approach. The legal materials used are all regulations on the disgorgement law and the disgorgement fund that apply in Indonesia, the USA and the UK. The technique of collecting legal materials is done by using library research techniques.FindingsThe rapid growth of the capital market in Indonesia still faces various legal issues such as various market manipulations, insider trading and illegal investment management activities. Based on the results of a comparative study, Indonesia does not yet have a calculation mechanism regarding the imposition of disgorgement on violators. Unlike Indonesia, the USA has the rules of practice and rules on fair funds and exchange commissions, and the UK has the decision procedure and penalties manual, which regulates the mechanism for calculating the imposition of disgorgement. Indonesia is solely able to use administrative action in imposing disgorgement, while in the USA and the UK, it can be through courts or direct administrative actions. These legal issues have resulted due to the lack of confidence by international investors and the growth of the investment climate in Indonesia itself.Research limitations/implicationsThis study examines the regulation of disgorgement and disgorgement funds in Indonesia, the USA and the UK. However, the focus of research in this paper is limited to legal issues that occurred in Indonesia.Practical implicationsThe results of this study may help to construct the ideal regulations on disgorgement and disgorgement funds in various countries and protect the capital market of the investors.Social implicationsThe results of this study are expected to be helpful for the investment climate in various countries, especially developing countries.Originality/valueThe ideal legal construction regarding disgorgement, namely, parties to the mechanism for imposing disgorgement; disgorgement filing mechanism; sanctions in disgorgement; disgorgement fund sources; provider of fundholding accounts; mechanism for calculating disgorgement imposition; disgorgement fund distribution mechanism.