Aspects of the Establishment and Enforcement of Anti-Market Abuse Preventative Measures in the United States of America

Abstract

The United States of America (the US) has to date successfully developed and adopted several distinct enforcement approaches and preventative measures to combat market abuse activities in all its capital and financial markets. For instance, apart from relying on civil, criminal and administrative penalties, the US anti-market abuse enforcement framework also employs a co-ordinated (joint) enforcement effort between the courts, self-regulatory organisations and the United States Securities and Exchange Commission (the SEC) at a federal level. Furthermore, other preventative measures such as private actions, public censure, bounty rewards and whistle-blower immunity are utilised to discourage and curb market abuse activities in the US. It is on this basis that this article will examine whether the integration of some of these US’s anti-market abuse enforcement approaches and preventative measures will improve the enforcement of the market abuse prohibition in South Africa. To this end, selected preventative measures and enforcement approaches that are adopted in the US will be discussed and, where appropriate, contrasted with similar measures and/or enforcement methods in South Africa so as to identify and recommend possible enforcement approaches that could be incorporated in the South African anti-market enforcement framework. This is done by, first, discussing the co-operation between the SEC, the Department of Justice (the DOJ) and the courts. Secondly, the co-operation between the SEC and other selected self-regulatory organisations will be analysed. Lastly, the adoption and establishment of a good enforcement ethics culture in the US will be examined.

DOI: 10.5901/mjss.2014.v5n7p253