I guess that when some market abuse happens within the US, it is relatively easy for SEC to track down the criminals and sue them. But what makes me wonder is that what happens in case someone runs manipulation outside of the US.
To add a bit more specifics to the question, let's assume that:
The abuser is not the US citizen/legal entity
The abuser can be either natural or legal person
The abuser uses a non-American broker (not sure how this exactly works, I guess someone just becomes a client of local (for them) broker, and it redirects trades using an American subsidiary)
Type of abuse: any, from insider trading to a bear raid
To complicate things a bit, let's also assume that the abuser is a resident of and performs their action from some complicated jurisdiction, e.g. from an unfriendly one (China or Russia) or from offshore or from an underdeveloped country which has no market abuse laws.
The questions are:
- Regarding jurisdiction: Would such actions even fall under the US jurisdiction? (e.g. what about a case when someone distributes fake information in twitter (Canadian company) regarding a Chinese company traded in the US?). Is some trading activity on the American exchange enough so that any market abuse actions regarding the instruments traded there could be considered under the US jurisdiction?
- Regarding tracking down: What legal instruments do the US authorities have to track down the abuser?
- Regarding prosecution: What legal instruments do the US authorities have to prosecute the abuser?
- Regarding brokers: What can the US authorities demand from a broker which runs abusive trades? (information, closing of the abuser's account, compensation?)