Criminal Law Characterization of Market Manipulation in the Context of Remote Investment Transactions

Abstract

An analysis of market manipulations related to remote investment transactions from the criminal law standpoint contributes to the establishment of unified standards and regulations for this area of activity. The study aims to provide a comprehensive analysis of the constituents of crime defined by Article 185.3 of the Russian Federation Criminal Code, characterizing its object, subject, and subjective and objective aspects in the context of remote investment transactions. The study notes that the immediate object of the analyzed crime should be understood as the possibility of citizens, organizations, or the government to realize their interests in the financial market without unlawful extraneous interference, while its subject, in some instances, could be either generalized or specialized. To ensure appropriate differentiation of liability for criminal market manipulations (including those involving remote investment transactions), the authors suggest replacing the wording “or are associated with the receiving of an excessive income or with the avoidance of losses on a large scale” used in Article 185.3 of the Russian Criminal Code with “with the purpose of receiving an excessive income or avoidance of losses on a large scale,” as well as make the following amendment to Part 2 of Article 185.3: “The wrongdoings, which are envisaged by Part 1 of the present article and have been committed by an organized group or authorized representatives of professional market participants or have caused especially large-scale actual losses to citizens and organizations”. Those legislative innovations would help prevent unlawful market manipulations related to remote investment transactions more effectively. The study has applied multiple general scientific methods of knowledge (analysis and synthesis, induction and deduction, generalization, abstraction, analogy, progression from the abstract to the concrete), combined with systemic, formal-logical, logical-legal, and interpretative methods.