At a February 2021 Cornerstone Research video conference, economists, attorneys and academics discussed recent enforcement actions and litigation in traditional financial and digital asset markets.
At a Cornerstone Research Expert Forum held in February 2021, a panel of expert economists, attorneys and academics discussed recent enforcement actions and litigation in traditional financial and digital asset markets. Below are some key takeaways from the discussion.
Markets stood up against high trading volume and volatility despite the pandemic and Brexit uncertainty.
The Financial Conduct Authority (FCA) enhanced its market surveillance programme by introducing such measures as:
- Electronic reporting capabilities for short selling disclosures
- A new measure to capture ‘Potentially Anomalous Trading’
- The Potentially Anomalous Trading measure complements the Market Cleanliness statistic and the Abnormal Trading Volume ratio.
Enforcement actions yield valuable data sources:
- In the second half of 2020, the FCA took action against Corrado Abbattista for engaging in market manipulation. In line with the FCA’s focus on enhanced electronic surveillance and data analyses, the Final Notice included a rich set of quantitative information.
- Panellists agreed that an early focus on data analyses to understand fact patterns has become key in internal and external investigations of market abuse.
Crypto markets come into focus:
- Today’s cryptocurrency markets show many features of more traditional financial markets.
- As crypto markets evolve and mature, robust institutional knowledge will be critical in analysing conduct such as alleged pump-and-dump schemes or misreporting of trading volume.
The views expressed herein do not necessarily represent the views of Cornerstone Research.