Preventing and Controlling the Manipulation of Financial Markets: Towards a Definition of ‘Market Manipulation’

Abstract

This paper is intended as a brief introduction to the topic of financial market manipulation. Although market manipulation is as old as markets themselves, the subject is presently generating a great of interest and discussion. While initially any efforts to prevent and control market manipulation were nationally focused, the advent of global and interconnected financial markets has required a reappraisal of such parochial approaches. In addition, the task has been made all the more difficult as the opportunities for market manipulation (and for disguising it) have increased exponentially with the development of new technologies for communication and trading and of ever more ingenious and sophisticated market practices, often using novel and esoteric financial instruments.