Parliament committee backs S&D proposal on five-year minimum jail term for insider trading
On the initiative of S&D MEP Emine Bozkurt, the members of the European Parliament's justice and home affairs committee today passed an important proposal to introduce a jail term of at least five-years across the EU for the most serious market manipulations and insider-trading offences.
The proposal adopted significantly modifies the draft legislation put forward by Commissioner Michel Barnier to harmonise EU countries' sanctions on market abuses, which does not set any specific penalty
Commenting on the vote, Emine Bozkurt said:
"The case of the Barclays Bank shows once again that what we need is to punish market abuse appropriately everywhere in Europe. The crisis is worsening and we cannot allow our citizens to keep paying the price while market abusers get away with it."
Welcoming Commissioner Barnier's announcement yesterday on improving and strengthening his initial proposal, Emine Bozkurt added:
"It is important that the public regains confidence in the financial markets. We have to prevent market abuse as it could take us deeper into a crisis. Since abuse can take place across borders, the differences in regulation regimes between member states undermine the internal market and leave the door wide open for perpetrators to 'shop around' for the best forum. EU-wide heavy penalties are needed immediately.
"We need to ensure we have the means to prosecute offenders if the crime is committed in several member states. This vote goes in that direction and I am happy that Commissioner Barnier has announced that the Commission will co-operate with the European Parliament to further improve this legislation without delaying its adoption."
The current sanctions to combat market abuse offences are weak and heterogeneous. The minimum and maximum jail terms for insider trading and market manipulation vary a lot. Minimum penalties for market manipulation vary from 15 days (Slovenia) to two years (Italy), while the maximum length of a prison sentence varies between 30 days (Estonia) to 15 years (Slovakia).