What is Market Abuse?

Legal Definition
Market abuse may arise in circumstances where financial investors have been unreasonably disadvantaged, directly or indirectly, by others who:

  • have used information which is not publicly available (insider dealing)
  • have distorted the price-setting mechanism of financial instruments
  • have disseminated false or misleading information

Abuse is split into two different aspects (under EU definitions):

  1. Insider dealing: where a person who has information not available to other investors (for example, a director with knowledge of a takeover bid) makes use of that information for personal gain
  2. Market manipulation: where a person knowingly gives out false or misleading information (for instance, about a company's financial circumstances) in order to influence the price of a share for personal gain

In 2013/2014, the EU updated its legislation on market abuse, and harmonised criminal sanctions. In the Danish European Union opt-out referendum, 2015, the Danish population rejected adoption of the 2014 market abuse directive (2014/57/EU) and much other legislation.
-- Wikipedia