Law Enforcement and the History of Financial Market Manipulation [Kietas viršelis]

Expanding on previously published articles, Markham chronicles the history of U.S. government efforts to prosecute commodity price manipulations and prevent price manipulations in the stock market. A chapter on postwar speculation describes the 1946 adoption of SEC Rule 10b-5, which would help the SEC expand its jurisdiction in insider trading cases. Skeptical of the Dodd-Frank Act, the author believes that populism does not make for effective regulation and proposes algorithms for blocking abusive trade orders from electronic trading platforms, but stops short of defining what the parameters would be. Annotation ©2014 Book News, Inc., Portland, OR (booknews.com)

This is the first book to examine the failure of the U.S. government to properly regulate, monitor, and prevent financial speculation and manipulation of various markets. While the nineteenth century is surveyed in chapter 1, the book's focus is on the period from the first congressional efforts at regulation in 1936 to the present.

Price manipulation techniques are intentionally difficult to understand, detect, and prove, and the rise of high-frequency trading has further complicated the task. This book maps the issues and traces the U.S. government's efforts to properly regulate, monitor, and prevent financial speculation and price manipulation in various markets. The coverage begins with the period from the late nineteenth century to the first congressional efforts at regulation in the 1930s and continues on to the present, with a full chapter on the legal and financial aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

All the U.S. financial institutions involved with such regulation--the most prominent of which are the Securities and Exchange Commission created in 1934 and the Commodity Futures Trading Commission created in 1974--are discussed here in detail. Also covered are major financial imbroglios such as the Enron scandal and the ill-timed speculation in natural gas prices that brought down the Amaranth Advisors hedge fund. The last chapter discusses the difficulty of initiating successful prosecutions of financial fraud and price manipulation and proposes a new approach to preventing manipulative practices.