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Capital market offenses in Malaysia

Author

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  • Yoke Yue Kan

Abstract

Purpose - The purpose of this study is to review and evaluate the salient features of stock market manipulation in Malaysia. The research questions used are: Who was involved? How it happened? What were the consequences? Design/methodology/approach - This study has been conducted using content and thematic analysis. This study includes multiple sources of information to help establish the stylized facts and it uses cases that have been prosecuted in Malaysia for 2005-2015. Findings - This study presents arguments and empirical data supporting the view that the stock market manipulation was conducted by those in a privileged position and with access to information. Ethical failure, involving greed, self-interest, dishonesty and a preoccupation with a quick profit, could explain why stock market manipulation happened. Manipulation harms legitimate investors, as share prices and earnings of companies are affected. Practical implications - A better understanding about the prevalence, characteristics and consequences of the market manipulation problems will be useful for stakeholders, investors and policymakers in the financial industry for promoting and maintaining a fair, efficient and transparent stock market. Originality/value - The originality of this paper lies in examining and presenting interpretations based on contemporary phenomenon within the real-life context of Malaysia. There is little study or literature that focuses on Malaysia, especially in examining stock market manipulation by integrating finance and management perspectives to form a comprehensive understanding of the issue.

Suggested Citation

  • Yoke Yue Kan, 2018. "Capital market offenses in Malaysia," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 10(2), pages 171-188, May.
    • Handle: RePEc:eme:qrfmpp:qrfm-04-2017-0038
    DOI: 10.1108/QRFM-04-2017-0038
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    References listed on IDEAS

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    1. Rajesh K. Aggarwal & Guojun Wu, 2006. "Stock Market Manipulations," The Journal of Business, University of Chicago Press, vol. 79(4), pages 1915-1954, July.
    2. Claire E. Crutchley & Marlin R. H. Jensen & Beverly B. Marshall, 2007. "Climate for Scandal: Corporate Environments that Contribute to Accounting Fraud," The Financial Review, Eastern Finance Association, vol. 42(1), pages 53-73, February.
    3. Dewa Gede Wirama & I Gusti Bagus Wiksuana & Zuraidah Mohd-Sanusi & Soheil Kazemian, 2017. "Price Manipulation by Dissemination of Rumors: Evidence from the Indonesian Stock Market," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 429-434.
    4. Tālis J. Putniņš, 2012. "Market Manipulation: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 26(5), pages 952-967, December.
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    Cited by:

    1. Bao Quan Lock & Ei Yet Chu & Saw Imm Song & Lian Yin Lee, 2019. "Exchange Rate Movements, Earnings Management and Stock Returns in Malaysia," Capital Markets Review, Malaysian Finance Association, vol. 27(1), pages 53-68.

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