Regulating manipulation in the era of meme stocks, crypto-assets and inelastic markets

Matthijs Nelemans

Regulating manipulation in the era of meme stocks, crypto-assets and inelastic markets

Department of Criminal Law

Research output: Working paper › Scientific › peer-review

Abstract

The GameStop and AMC sagas clearly show that the US approach of market manipulation has long underexposed the objective side of traders’ behavior and relied too much on subjective aspects. When I wrote this back in 2008, I also proposed an objectified definition of market manipulation based on the unsupported price pressure standard. In this contribution I have tested my proposal from 2008 against the facts of the GameStop case, and it appears that the unsupported price pressure standard is indeed a useful tool also in this context. Following Popper's line of thought, this finding is not necessarily very significant, as it merely confirms a proposition. However, since it is highly unlikely that the US anti-manipulation provisions can be used in the GameStop and AMC case, we now have further reason to conclude that those provisions are flawed.

Keywords: manipulation, market abuse, securities fraud, securities regulation, financial markets

JEL Classification: G10, G14, K14, K22, K42, N2

Original language	English
Number of pages	36
Publication status	In preparation - 2021

Crime and Criminal Justice in the Age of Globalization and Digitalization
Bekker, S. (Researcher), Borghouts, I. (Researcher), Bosma, A. (Researcher), Braakman, M. H. (Researcher), Groenhuijsen, M. (Researcher), Groenleer, M. (Researcher), Houwerzijl, M. (Researcher), Karsten, N. (Researcher), Kooijmans, T. (Researcher), Nelemans, M. (Researcher), Oosterom-Staples, H. (Researcher), Rijken, C. (Researcher), Spapens, A. (Researcher), Wilthagen, T. (Researcher), Zouridis, S. (Researcher), van Hout, D. (Researcher), van Noorloos, M. (Researcher), van Ostaaijen, J. (Researcher), van Waas, L. (Researcher), Ligthart, S. (Researcher), van Sliedregt, E. (Researcher), Quackelbeen, L. (Researcher), Bemelmans, J. (Principal Investigator), Jaspaert, E. (Researcher), Joyce, T. (Researcher), de Vocht, D. (Researcher), Jacobs, P. (Researcher) & Dejean de la Bâtie, A. (Researcher)
1/01/19 → 31/12/23
Project: Research project

Cite this

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title = "Regulating manipulation in the era of meme stocks, crypto-assets and inelastic markets",

abstract = "The GameStop and AMC sagas clearly show that the US approach of market manipulation has long underexposed the objective side of traders{\textquoteright} behavior and relied too much on subjective aspects. When I wrote this back in 2008, I also proposed an objectified definition of market manipulation based on the unsupported price pressure standard. In this contribution I have tested my proposal from 2008 against the facts of the GameStop case, and it appears that the unsupported price pressure standard is indeed a useful tool also in this context. Following Popper's line of thought, this finding is not necessarily very significant, as it merely confirms a proposition. However, since it is highly unlikely that the US anti-manipulation provisions can be used in the GameStop and AMC case, we now have further reason to conclude that those provisions are flawed. Keywords: manipulation, market abuse, securities fraud, securities regulation, financial markets JEL Classification: G10, G14, K14, K22, K42, N2 ",

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AB - The GameStop and AMC sagas clearly show that the US approach of market manipulation has long underexposed the objective side of traders’ behavior and relied too much on subjective aspects. When I wrote this back in 2008, I also proposed an objectified definition of market manipulation based on the unsupported price pressure standard. In this contribution I have tested my proposal from 2008 against the facts of the GameStop case, and it appears that the unsupported price pressure standard is indeed a useful tool also in this context. Following Popper's line of thought, this finding is not necessarily very significant, as it merely confirms a proposition. However, since it is highly unlikely that the US anti-manipulation provisions can be used in the GameStop and AMC case, we now have further reason to conclude that those provisions are flawed. Keywords: manipulation, market abuse, securities fraud, securities regulation, financial markets JEL Classification: G10, G14, K14, K22, K42, N2

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ER -

Regulating manipulation in the era of meme stocks, crypto-assets and inelastic markets

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Crime and Criminal Justice in the Age of Globalization and Digitalization

Cite this