Is there banks stocks’ manipulation around announcement of national elections and how can we detect and recover ill gotten assets?. The case of Greece
| DOI | https://doi.org/10.1108/JMLC-07-2013-0026 |
| Date | 07 October 2014 |
| Published date | 07 October 2014 |
| Pages | 402-415 |
| Author | Spyridon Repousis |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation |
Is there banks stocks’
manipulation around
announcement of national
elections and how can we detect
and recover ill gotten assets?
The case of Greece
Spyridon Repousis
Department of Economics, University of Nicosia, Nicosia, Cyprus
Abstract
Purpose – The purpose of this paper is to examine the inuence of major non-economic events, such as
the announcement of Greek national parliamentary elections during the period 2000-2009, and search
for stock manipulation and methods to detect and recover ill gotten assets. The Financial Sector in
Greece is one of the most important and fast growing sectors during recent years and accounts to about
16.17-17.74 per cent of gross domestic product. The ten largest Greek banks listed in the Athens Stock
Exchange, accounted to 38.34 per cent of the whole capitalisation of the Athens Stock Exchange during
year end 2009.
Design/methodology/approach – By using event study methodology and Market Model and
analyzing data of all Greek bank stocks prices listed in Athens Stock Exchange, before and after the
announcement of four Greek national parliamentary elections during period 2000-2009, we nd
interesting results about stock market manipulation.
Findings – Using daily data from the Athens Stock Exchange, the results of this paper claim that the
four Greek national parliamentary elections during the period 2000-2009, had no statistically signicant
effect on the Greek banks stocks. The results show that Cumulative Average Abnormal Returns
(CAARs) were slightly positive or negative for Greek banks’ stocks, but not statistically signicant in 5
and 10 per cent condence levels. Results show no manipulation effect in banks’ stocks even if
single-party governments in Greece caused elections early, sudden or even opportunistic timing, having
an incentive to attempt to manipulate stocks to increase their chances of re-election.
Practical implications – Results show that CAARs were slightly positive or negative for Greek
banks stocks, but not statistically signicant in 5 and 10 per cent condence levels, but when illicit
funds or assets have been acquired from stock manipulation, as small as can be, then one fact remains
constant. Proceeds from illicit activities must be disguised in some way to avoid being discovered and
then being recovered. Especially, during current the nancial crisis, debt crisis and the extraordinary
liquidity support measures taken by the European Central Bank (ECB), International Monetary Fund
(IMF) and European Commission to support Greek economy, using methods to detect and recover ill
gotten assets are extremely important. Indirect methods such as net worth analysis, bank deposit
analysis, expenditure method or sources and application of funds analysis, to detect ill gotten assets,
and then when ill gotten income and assets from bank stock manipulation are found, a restraining order
or court order will help to recovery assets by freezing and nally conscating them by two types of
forfeiture – criminal and civil forfeitures. Establishing a code of conduct informing employees of the
JEL classication – G14, G15, G21, K42
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
JMLC
17,4
402
Journal of Money Laundering Control
Vol. 17 No. 4, 2014
pp. 402-415
© Emerald Group Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2013-0026
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