Comparative study of disgorgement and disgorgement fund regulations in Indonesia, the USA and the UK
| DOI | https://doi.org/10.1108/JFC-01-2022-0022 |
| Published date | 09 March 2022 |
| Date | 09 March 2022 |
| Pages | 635-649 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Dona Budi Kharisma,Afilya Hunaifa |
Comparative study of disgorgement
and disgorgement fund regulations
in Indonesia, the USA and the UK
Dona Budi Kharisma and Afilya Hunaifa
Business Law, Faculty of Law, Sebelas Maret University, Surakarta, Indonesia
Abstract
Purpose –The purpose of this paper is two-fold: to analyze the legal issues on disgorgement and
disgorgementfunds in Indonesia, the USA and the UK and to construct the ideal law regarding disgorgement
and disgorgementfund.
Design/methodology/approach –The type of legal research in this paper isnormative legal research.
The research approachused is a comparative approach and a legal approach. The legal materialsused are all
regulationson the disgorgement law and the disgorgement fund that apply in Indonesia,the USA and the UK.
The techniqueof collecting legal materials is done by using library researchtechniques.
Findings –The rapid growth of the capital market in Indonesia still faces various legal issues such as
various market manipulations, insider trading and illegal investment managementactivities. Based on the
results of a comparativestudy, Indonesia does not yet havea calculation mechanism regarding the imposition
of disgorgement on violators.Unlike Indonesia, the USA has the rules of practice and rules on fair funds and
exchange commissions, and the UK has the decision procedure and penalties manual, which regulates the
mechanism for calculating the imposition of disgorgement. Indonesia is solely able to use administrative
action in imposing disgorgement, while in the USA and the UK, it can be through courts or direct
administrative actions. These legal issues have resulted due to the lack of confidence by international
investorsand the growth of the investment climate in Indonesia itself.
Research limitations/implications –This study examines the regulation of disgorgement and
disgorgementfunds in Indonesia, the USA and the UK. However, the focus of research in this paper is limited
to legal issuesthat occurred in Indonesia.
Practical implications –The results of this study may help to construct the ideal regulations on
disgorgementand disgorgement funds in various countries and protect the capitalmarket of the investors.
Social implications –The results of this study are expected to be helpful for the investment climate in
various countries,especially developing countries.
Originality/value –The ideal legal construction regarding disgorgement, namely, parties to the
mechanism for imposing disgorgement; disgorgement filing mechanism; sanctions in disgorgement;
disgorgement fund sources; provider of fundholding accounts; mechanism for calculating disgorgement
imposition;disgorgement fund distribution mechanism.
Keywords Investor protection, Disgorgement, Disgorgement fund
Paper type Research paper
1. Introduction
Law and economics are essential analytical disciplines in the study of law and economics
(Kharisma, 2020). Although, there are controversies on how is the best way to find out the
connection between economic relations and the regulatory role of law (May, 2018). As the
market in general, a capital marketis where buyers and sellers meet. The difference between
the two terms is only in the goods sold. The existenceof legal certainty primarily determines
the development and progressof a capital market for the stakeholder,especially the investor
community. (Pradiptoet al.,2019).
Disgorgement
fund
regulations in
Indonesia
635
Journalof Financial Crime
Vol.30 No. 3, 2023
pp. 635-649
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-01-2022-0022
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