Sanctions and public enforcement of insider trading laws in Europe

Abstract

Every day insider trading takes place legally when corporate insiders buy or sell stock in their own companies within the confines of company policy and the regulations governing this trading. The type of insider trading discussed here is the illegal kind. It is the trading that has been influenced by the privileged possession of corporate confidential information about important events. The concept of shareholder value emerged as people started to invest their capital in risky projects of great magnitude. The main challenge was to gain the confidence of investors in order to make their capital available. The central issue was to organize the control of potential managers of capital opportunism. Initially, the securities market was in essence unregulated. The first appearance of regulation for financial markets dates back to the thirteenth century and concerns the registration of securities in England. It is only in the Nineteenth Century that the first provisions governing the issuance of shares were established. However, modern securities regulation only dates back to early twentieth century.