Insider trading laws to counter financial crime: a comparative study of Mauritius, UK and US laws
| Date | 24 January 2023 |
| Pages | 362-375 |
| DOI | https://doi.org/10.1108/JFC-11-2022-0273 |
| Published date | 24 January 2023 |
| Author | Ambareen Beebeejaun |
Insider trading laws to counter
financial crime: a comparative
study of Mauritius, UK and US laws
Ambareen Beebeejaun
Department of Law, University of Mauritius, Reduit, Mauritius
Abstract
Purpose –The rise in businessactivities coupled with free trade liberalisationacross countries has entailed
an increase in securitiestransaction as well as insider trading (IT). In fact, IT is characterised by the influence
and usage of some prior knowledge concerningsensitive information of a corporate body which results in a
financial benefit to the insider trader. The practice of IT is not only unethical but also illegal and this
statement is witnessedby the mushrooming of laws across the globe categorising IT as an offence. However,
the type of punishment varies in differentcountries depending on various factors. Consequently, the purpose
of this paper is to assess theadequacy and efficiency of IT laws in the context of a developingcountry being
Mauritius.
Design/methodology/approach –To achieve the research objective, the Mauritian laws on IT were
compared with the corresponding laws of some developed countries like the USA and the UK. As such, a
qualitative research method was adopted. In particular, the black letter approach was used to examine the
relevant laws of Mauritius, UK and USA on IT. A comparative analysis was conductedconcerning IT laws
for each country with the view of suggesting recommendations for Mauritian stakeholders to adopt to
enhancethe existing legal and regulatory framework on IT.
Findings –It was found that Mauritian IT laws are largely inspired from both the US and UK
corresponding legislation.However, Mauritian laws need to be strengthened by imposing some moresevere
penalties in terms of fines and terms of imprisonmentlike the USA has established. The Mauritian Financial
Services Commissionas the regulator also needs to play a more active role in disseminating particularitiesof
IT laws, offencesand penalties to the civil society at large.
Originality/value –At present,this study will be among the first academic writings on the efficiency of IT
laws in Mauritius and also, because existing literature is quite scarce on assessing the adequacy of IT
legislation in developing countries,this research aims at filling in the gap in literature. The study is carried
out with the aim of combininga large amount of empirical, theoretical and factualinformation that can be of
use to variousstakeholders and not only to academics.
Keywords Insider trading in Mauritius, Insider trading and financial crime,
Insider dealing in Mauritius, Insider trading and securities act, The FSC and insider trading
Paper type Research paper
1. Introduction
The rise in business activities coupled with free trade liberalisation across countries has
simultaneously entailed an increasein securities transaction as well as insider trading (IT).
Several scholars like He (2022) and Merl et al. (2022) consider IT to be a financial crime
which occurs when transacting with securities notably during the buying and selling of
shares. In fact, IT is characterised by the influence and usage of some prior knowledge
concerning sensitive information of some future events of a corporatebody which results in
Conflict of interest: The author declares that there is no competing financial interest or personal
relationship that could have appeared to influence the work reported in this paper.
JFC
31,2
362
Journalof Financial Crime
Vol.31 No. 2, 2024
pp. 362-375
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-11-2022-0273
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
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