The Crime of Proceeds of front Running in Exchanges: An Obstacle for Efficiency of Capital Market

Document Type : Scientific research

Authors

Mehdi Chegni,

Younes Nademi,

Ahmad Mousavi,

Mohammad Mehdi hasemi Kia,

https://doi.org/10.22067/lowecon.2022.41776

Abstract

Due to the increasing expansion of the capital market and the constant supply of shares of various companies in it and the double desire of citizens to enter this market, the sensitivity and importance of the stock market doubles, given that economic security is one of The most important infrastructure of domestic and foreign investment is the protection and provision of health and security of information related to capital market companies. It is very important and significant that the legislators of the capital market economic environment in most countries that are active and leading in this field by criminalizing disciplinary behavior. The dominance of the capital market hinders actions that undermine market efficiency and the trust of capital market actors, which is the cornerstone of transactions. One of these behaviors is to anticipate trading in this market. Therefore, it should be noted that the punishment for this crime should be determined in such a way that it causes a deterrent to a high degree. Access to undisclosed information in the capital market by some brokers in this market is inevitable, if the persons who have access to this information due to working conditions and are obliged to maintain and not use this information until the public release of this information, to It is a premeditated crime in capital market transactions to take advantage of oneself or another in order to make a profit or avoid a loss. In this article, a descriptive-analytical method was used to examine "advance in transactions" along with the analysis of the constituent elements and the conditions for committing this crime in a comparative manner. Considering the importance of security in the stock market and considering the current economic conditions of the country and related sensitivities and the impact of these conditions on changing the nature of premeditated crime in capital market transactions and consequently its punishment in some cases, The legal and criminal enforcement of this crime was examined in accordance with other criminal laws and the degree of deterrence of the penalties provided for it.
 

Keywords

Front Running

Stock Exchange

Trades

Efficiency Market

Disruption to the Economic System

Criminalization

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