ANALYZING THE FORMS OF MARKET ABUSE: MARKET MANIPULATION AND INSIDER TRADING

AUTHOR – RISHIKA SHARMA, STUDENT AT AMITY UNIVERSITY, MUMBAI

BEST CITATION – RISHIKA SHARMA, P ANALYZING THE FORMS OF MARKET ABUSE: MARKET MANIPULATION AND INSIDER TRADING, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (1) OF 2025, PG. 353-361, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

Market abuse is a broad term which defines any action that disadvantages other investors in a qualifying trading platform or market. Two major types of market abuse are ‘Market Manipulation’ and ‘Insider Trading.’ Market manipulation is referred to as an act of attempting to deceive the investors by way of misleading appearances of the price of security or commodity or any other financial instruments. This can be achieved through ‘Pump and Dump Schemes’ and ‘Spoofing and Layering’, which are called types of market manipulation. Market manipulation can be challenging for the regulators to detect and prove. Certain ways have to be taken into consideration to prevent market manipulation and safeguard the investors. Insider trading indicates the illegal practice which is conducted by the employees or directors of a company, wherein they supply crucial information related to the stocks to the third parties. Insider trading can be illegal as well as legal. Challenges come into the picture when detecting insider trading practice. Various effective ways can be noted for the prevention of insider trading in the company.

Keywords: Market abuse, Market manipulation, Insider trading, Challenges while detection, Tactics for prevention, Illegal and legal insider trading.