Market abuse may arise in circumstances where financial investors have been unreasonably disadvantaged, directly or indirectly, by others who:
- have used information which is not publicly available (insider dealing)
- have distorted the price-setting mechanism of financial instruments
- have disseminated false or misleading information.
Market Abuse is split into two different aspects (Under EU definitions):
- Insider dealing
- Where a person who has information not available to other investors (e.g. a Director with knowledge of a takeover bid) makes use of that information for personal gain.
- Market manipulation
- Where a person knowingly gives out false or misleading information (For instance about a company's financial circumstances) in order to influence the price of a share for personal gain;
In addition, Money laundering may be considered a form of market abuse.
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—Ralph Waldo Emerson (1803–1882)
“The common faults of American language are an ambition of effect, a want of simplicity, and a turgid abuse of terms.”
—James Fenimore Cooper (1789–1851)