ABSTRACT
Market abuse is defined both in statute and in the European Union (EU) Market Abuse Directive (MAD). 2 Section 118 of the Financial Services and Markets Act
information; disclosing inside information otherwise than in the proper course of employment; trading which gives misleading or false impressions; trading which uses deception or fictitious devices; the disclosing of information which leads to a misleading or false impression; and, behaviour that is likely to distort the market. 3 In short, as outlined in the introduction, the abuse is made up of insider dealing and market manipulation. In a similar vein, the MAD 4 also splits the behaviour into these two areas. Inside information is defined as ‘information that is precise, nonpublic and likely to have a significant impact on the price of a financial instrument’, 5 whilst market manipulation is said to be comprised of three forms:
• transactions and orders to trade that give false or misleading signals or secure the price of a financial instrument at an artificial level;
• transactions or orders to trade that employ fictitious devices; and • distribution of information likely to give false or misleading signals.
