11174nam 2200493 450 991079892650332120230328234445.01-394-17814-X(MiAaPQ)EBC7081847(Au-PeEL)EBL7081847(OCoLC)1344158918(CKB)24815138200041(EXLCZ)992481513820004120230205d2020 uy 0engurcnu||||||||txtrdacontentcrdamediacrrdacarrierCorruption and fraud in financial markets malpractice, misconduct and manipulation /Carol Alexander, Douglas CummingEngland :Wiley,[2020]©20201 online resource (626 pages)Print version: Alexander, Carol Corruption and Fraud in Financial Markets Newark : John Wiley & Sons, Incorporated,c2020 9781119421771 Includes bibliographical references and index.Cover -- Title Page -- Copyright -- Contents -- About the Editors -- List of Contributors -- Foreword -- Acknowledgements -- Chapter 1: Introduction -- Part I What are Manipulation and Fraud and why do They matter? -- Chapter 2: An Overview of Market Manipulation -- 2.1 Introduction -- 2.2 Definitions of Market Manipulation -- 2.2.1 Legal Interpretation and Provisions against Market Manipulation -- 2.2.2 Economics and Legal Studies Perspective -- 2.3 A Taxonomy of the Types of Market Manipulation -- 2.3.1 Categories of Market Manipulation -- 2.3.2 Market Manipulation Techniques -- 2.4 Research on Market Manipulation -- 2.4.1 Theoretical Literature -- 2.4.2 Empirical Literature -- 2.4.3 Conclusions from the Research on Market Manipulation -- 2.5 Summary and Conclusions -- References -- Chapter 3: A Taxonomy of Financial Market Misconduct -- 3.1 Introduction -- 3.2 Challenges in Research on Financial Market Misconduct -- 3.3 Defining Financial Market Misconduct -- 3.3.1 Price Manipulation -- 3.3.2 Circular Trading -- 3.3.3 Collusion and Information Sharing -- 3.3.4 Inside Information -- 3.3.5 Reference Price Influence -- 3.3.6 Improper Order Handling -- 3.3.7 Misleading Customers -- 3.4 Defining Financial Fraud -- 3.4.1 Credit Card Fraud -- 3.4.2 Money Laundering -- 3.4.3 Financial Statement Fraud -- 3.4.4 Computer Intrusion Fraud -- 3.5 Conclusion -- References -- Chapter 4: Financial Misconduct and Market-Based Penalties -- 4.1 Introduction -- 4.2 Notable Cases of Financial Reporting Fraud -- 4.3 Financial Reporting Misconduct and Legal Redress -- 4.4 Evolution of US Financial Regulations -- 4.4.1 Private Securities Litigation Reform Act (1995) -- 4.4.2 Sarbanes-Oxley Act (2002) -- 4.4.3 Dodd-Frank Act (2010) -- 4.5 Legal versus Market-Based Penalties for Financial Misconduct -- 4.5.1 Common Forms of Legal Penalties.4.5.2 Role of Market-Based Penalties -- 4.6 Firm-Level Penalties for Corporate Financial Misconduct -- 4.6.1 Direct Economic Costs Captured in Loss of Market Value -- 4.6.2 Loss of Firm Reputation -- 4.6.3 Spillover of Reputational Effect -- 4.6.4 Governance Risk and Insurance Premiums -- 4.6.5 Reduced Liquidity -- 4.6.6 Access to Financing -- 4.6.7 Reduced Innovation -- 4.6.8 Mergers and Acquisitions -- 4.7 Individual-Level Penalties for Corporate Financial Misconduct -- 4.7.1 Executive and Director Turnover -- 4.7.2 Impaired Career Progression -- 4.7.3 Loss of Reputation -- 4.7.4 Executive Compensation -- 4.7.5 Strengthened Monitoring -- 4.8 Causes, Risks, and Moderators of Financial Misconduct -- 4.8.1 Fraud Incentives -- 4.8.2 Risk Factors -- 4.8.3 Public Enforcement: Regulatory and Judicial Stringency -- 4.8.4 Public Enforcement: Detection and Surveillance -- 4.8.5 Private Enforcement -- 4.9 Other Non-Financial Misconduct -- 4.10 Concluding Remarks -- References -- Chapter 5: Insider Trading and Market Manipulation -- 5.1 Introduction -- 5.2 Regulatory Framework on Insider Trading and Market Manipulation -- 5.3 Recent Examples of Market Manipulation and Insider Trading -- 5.4 Conclusions -- References -- Chapter 6: Financial Fraud and Reputational Capital -- 6.1 Financial Frauds in the 2000s -- 6.2 The Effects of Fraud Revelation on Firm Value and Reputational Capital -- 6.2.1 Market Value Losses When Financial Misconduct Is Revealed -- 6.2.2 Spillover Effects -- 6.2.3 Reputational Losses for Financial Misconduct -- 6.2.4 Direct Measures of Lost Reputational Capital -- 6.2.5 Do Misconduct Firms Always Lose Reputational Capital? -- 6.2.6 Rebuilding Reputational Capital -- 6.3 The Effects of Fraud Revelation on Shareholders and Managers -- 6.3.1 Should Shareholders Pay? Do Managers Pay? -- 6.3.2 Do Shareholders Pay Twice?.6.3.3 Are Firm-Level Penalties Efficient? -- 6.3.4 Consequences for Managers and Directors -- 6.4 Why Do Managers Do It? Motives and Constraints -- 6.4.1 Motives for Financial Misconduct -- 6.4.2 Constraints on Financial Misconduct -- 6.5 Proxies and Databases Used to Identify Samples of Financial Statement Misconduct -- 6.6 Conclusion: Reputation, Enforcement, and Culture -- References -- Part II How and Where Does Misconduct Occur? -- Chapter 7: Manipulative and Collusive Practices in FX Markets -- 7.1 Introduction -- 7.2 Different Types of FX Orders -- 7.3 The Unique FX Market Structure -- 7.4 Examples of Manipulative and Collusive Practices in FX Markets -- 7.4.1 Front Running -- 7.4.2 Triggering Stop-Loss Orders -- 7.4.3 'Banging the Close' -- 7.4.4 Collusion and Sharing of Confidential Information -- 7.4.5 Spoofing -- 7.4.6 Market Abuse via Electronic Trading Platforms -- 7.5 The Reform Process -- References -- Chapter 8: Fraud and Manipulation within Cryptocurrency Markets -- 8.1 Introduction -- 8.2 Why Do fraud and Manipulation Occur in Cryptocurrency Markets? -- 8.2.1 Lack of Consistent Regulation -- 8.2.2 Relative Anonymity -- 8.2.3 Low Barriers to Entry -- 8.2.4 Exchange Standards and Sophistication -- 8.3 Pump and Dumps -- 8.3.1 Case Studies -- 8.4 Inflated Trading Volume -- 8.4.1 Case Study: January 2017 and PBoC Involvement -- 8.5 Exchange DDoS Attacks -- 8.5.1 Case Study -- 8.6 Hacks and Exploitations -- 8.6.1 Exchange Hacks -- 8.6.2 Smart Contract Exploits -- 8.6.3 Protocol Exploitation -- 8.7 Flash Crashes -- 8.7.1 GDAX-ETH/USD Flash Crash -- 8.8 Order Book-Based Manipulations -- 8.8.1 Quote Stuffing -- 8.8.2 Order Spoofing -- 8.9 Stablecoins and Tether -- 8.9.1 Tether Historical Timeline -- 8.9.2 Tether Controversy and Criticism -- 8.9.3 Tether's Significance in Cryptocurrency Global Markets -- 8.10 Summary and Conclusions.References -- Chapter 9: The Integrity of Closing Prices -- 9.1 Why Closing Prices Matter -- 9.2 Painting the Tape and Portfolio Pumping -- 9.3 'Bang-the-Close' Manipulation: The Response of Financial Intermediaries -- 9.4 Stock Price Pinning on Option Expiration Dates -- 9.5 Conclusion: Lessons for the Regulation and Design of Financial Markets -- References -- Chapter 10: A Trader's Perspective on Market Abuse Regulations -- 10.1 Introduction -- 10.2 Getting the Trading Edge -- 10.3 A Typical Trader's Market Window -- 10.4 Wash Trades -- 10.5 High Ticking/Low Ticking - Momentum Ignition -- 10.6 Spoofing -- 10.7 Layering -- 10.8 Smoking -- 10.9 Case Study: Paul Rotter a.k.a. 'The Flipper' -- 10.10 The Innocent and the Guilty -- 10.11 What Are Exchanges Doing to Prevent Market Abuse? -- 10.11.1 CME Group -- 10.11.2 ICE -- 10.12 What Are Trading Companies Doing to Prevent Abuse? -- 10.13 Will There Be an End to Market Abuse? -- Part III Who are These Scoundrels? -- Chapter 11: Misconduct in Banking: Governance and the Board of Directors -- 11.1 Introduction -- 11.2 Literature Review -- 11.3 Research Design -- 11.3.1 Data -- 11.3.2 Empirical Design -- 11.3.3 Variables -- 11.4 Empirical Results -- 11.4.1 Main Results -- 11.4.2 Results for Different Classes of Enforcement Actions -- 11.4.3 Does Better Board Quality Alleviate Shareholder Wealth Losses? -- 11.5 Conclusion -- References -- Chapter 12: Misconduct and Fraud by Investment Managers -- 12.1 Introduction -- 12.2 Related Research -- 12.3 The Investment Advisers Act of 1940 and Mandatory Disclosures -- 12.4 Data -- 12.4.1 Investment Fraud -- 12.4.2 Form ADV Data and Variables -- 12.5 Predicting Fraud and Misconduct -- 12.5.1 Predicting Fraud by Investment Managers -- 12.5.2 Interpreting the Predictive Content of the Models -- 12.5.3 K-Fold Cross-Validation Tests.12.6 Predicting the Initiation vs. the Continuance of Fraud -- 12.7 Firm-Wide Fraud vs. Fraud by a Rogue Employee -- 12.8 Out-of-Sample Prediction and Model Stability -- 12.9 Policy Implications and Conclusions -- References -- Chapter 13: Options Backdating and Shareholders -- 13.1 Introduction -- 13.2 Stock Return Patterns around Option Grants -- 13.3 The Backdating Practice -- 13.4 Media Coverage, Restatement, and Investigation -- 13.5 Stock Market Reaction to Public Revelations of Backdating -- 13.6 Investor Reaction to (and Anticipation of) Public Revelations -- 13.7 Other Types of Misbehaviour Related to Option Grants -- 13.7.1 Forward Dating -- 13.7.2 Selective Disclosure -- 13.7.3 Option Exercise Backdating -- 13.7.4 Independent Director Backdating -- 13.8 Connections with Questionable Practices by Corporate Executives and Other Agents -- 13.9 Conclusion -- References -- Chapter 14: The Strategic Behaviour of Underwriters in Valuing IPOs -- 14.1 Valuing IPOs -- 14.2 The Underwriter's Incentives in the Valuation of IPOs -- 14.3 Literature Review -- 14.4 Sample, Data, and Methodology -- 14.4.1 Sample and Data -- 14.4.2 Alternative Selection Criteria of Comparable Firms -- 14.4.3 Valuation Bias and IPO Premium -- 14.5 Results -- 14.5.1 Algorithmic Selections -- 14.5.2 Affiliated and Unaffiliated Analysts -- 14.5.3 Underwriters' Selection of Comparable Firms Pre- vs. Post-IPO -- 14.5.4 Pre- vs. Post-IPO Selections and Industry Effects -- 14.6 Conclusions -- References -- Chapter 15: Governance of Financial Services Outsourcing: Managing Misconduct and Third-Party Risks -- 15.1 Introduction -- 15.2 The Four Components in Outsourcing -- 15.2.1 Efficient Outsourcing -- 15.2.2 The Four-Factor Governance Model -- 15.2.3 Misconduct in Outsourcing and the Ability of Financial Institutions to Monitor.15.3 The Interaction between Contracting and Monitoring."Apart from headline cases like the LIBOR scandal, financial market misconduct is actually prevalent in a surprisingly large number of firms. According to a study published in 2014, financial market misconduct and fraud affects about 15% of publicly listed companies each year; and a study published in 2008 claimed that it can cost between 20% and 38% of the company's value"--Provided by publisher.Commercial crimesCommercial crimes.364.168Alexander Carol(Economist),20566Cumming DouglasMiAaPQMiAaPQMiAaPQBOOK9910798926503321Corruption and fraud in financial markets3819268UNINA