Securities regulation and the prevention of securities fraud : a comparative study
The study aims at identifying the most appropriate and effective approach towards securities regulation and the prevention of securities fraud, given the specific legal and socio-economic circumstances of a particular country. On the basis of the above premise, a number of more specific objectives of the study can be drawn, namely: • to ascertain the need for securities regulation by examining the concept and theory of regulation; • to examine the concept and theory of securities fraud by highlighting some of the definitional and criminological debate on it; • to evaluate the merits and demerits of certain types of regulatory measures in order to identify the most appropriate method of regulation in a given set of circumstances; • to assess the appropriateness of using the criminal law as a primary enforcement tool against securities fraud and the suitability of adopting other alternative remedies; and • to identify the main problems encountered in the regulation of securities and find ways to overcome them. Focusing on the above objectives, the study examines contemporary approaches towards the regulation of securities and the prevention of securities fraud, with special reference to two countries, namely, the United Kingdom and Malaysia. As a result, the study finds that despite the numerous objections against regulatory intervention in the operation of the financial markets, the practical reality of the modern-day securities market arguably necessitates some forms of regulation of the market. However, the choice of regulatory method is crucial in determining the success of the regulatory process in curing market inefficiencies and failures. Interestingly, the study discloses that the particular circumstances of a country may have a significant influence on the choice of regulatory method. Thus, a method of regulation that works well in a particular country may not necessarily work as well in a different country with a different set of circumstances. In addition, the method of regulation should also be flexible enough to meet the changing needs of the dynamic financial market.