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Enforcement

GLOBAL ENFORCEMENT IN THE FINANCIAL INDUSTRY

TOPIC

The research project “Global Enforcement in the Financial Industry” aims at empirically studying public enforcement against financial firms and their managers. Financial market participants have been an increasingly prominent target of regulatory and criminal enforcement across jurisdictions. This trend has been amplified since the Global Financial Crisis, when sanctions and other regulatory measures became an essential tool to restore public trust in the financial system, and legal, compliance and regulatory risk a top priority for financial firms.

COMPONENTS

The project has three main components  :

  • Quantitative and qualitative analysis of the regulatory enforcement by the Swiss Financial Markets Supervisory Authority (FINMA) and the subsequent courts’ practice.
  • Quantitative mapping and analysis of regulatory enforcement across time and jurisdictions (US, UK, CH, FR, DE, NL, SG, HK).
  • Comprehensive qualitative case studies of “high-profile” international enforcement cases against financial firms (including actions from regulators, criminal and civil prosecutors and anti-trust authorities and civil class-actions claimants).

OBJECTIVES

The main objective of the research project “Global Enforcement in the Financial Industry” is to address a series of research gaps identified in the existent literature and to contribute to the development of enforcement as a topic for empirical research. Moreover, the project offers a bridge across disciplines, contributing to and stimulating interactions between the fields of empirical legal studies, law and economics and public policy.

FUNDING

This 3-year project (February 2019 – January 2022) benefits from the financial support of the Swiss National Science Foundation and the Centre of Banking and Financial Law, University of Geneva.

TEAM

Present and former members of the project team include  :

PAPERS

Urs Zulauf/Roy Gava | FINMA’s Enforcement in Court

An empirical and legal assessment of the court rulings regarding the Swiss Financial Markets Supervisory Authority’s financial regulation enforcement

This article presents an empirical and qualitative analysis of the judicial review of the Swiss Financial Markets Supervisory Authority’s (FINMA) enforcement of financial market laws by the Federal Administrative Court and the Federal Supreme Court. It is part of a broader research project on global enforcement against financial institutions and their managers and employees. Based on an overview of FINMA’s enforcement, the appeal rate against FINMA decisions and the success rate of such complaints is discussed. In addition, the article analyses key areas in which the courts have supported or set limits to FINMA practices. Statements on the right to a fair trial and the scope of FIN- MA’s discretion are the object of a special analysis. In an overall assessment, the authors come to the conclusion that, despite FINMA’s relatively high success rate in court, there is an effective judicial control over its enforcement.

Swiss Review of Business and Financial Market Law (SZW), 2/2019, pp. 2-16.

PRESENTATIONS

Urs Zulauf | Whistleblowers  : Bestrafen, schützen oder sogar belohnen  ? | Jahrestagung Universitärer Forschungsschwerpunkt Finanzmarktregulierung UZH, Zürich, June 2019

Roy Gava | Challenging the regulators  : Enforcement actions and appeals in financial regulation | Law and Society Annual Meeting, Washington D.C., 1 June 2019

Urs Zulauf/Roy Gava | Enforcement par la FINMA  : première analyse empirique | Journée de droit bancaire et financier, Geneva, 15 November 2018.

Urs Zulauf/Roy Gava | Die FINMA vor Gericht  : empirische und qualitative Analyse der Gerichtspraxis | Tagung Compliance im Finanzdienstleistungsbereich, Zürich 13 November 2018.

DATA

We are currently collecting different data on enforcement in the financial industry. Datasets will be published here when they are publicly released.