Challenges In Detection Of Securities Fraud In The Digital Age: Algorithmic Manipulation, Blockchain Misuse, And Cybersecurity
- IJLLR Journal
- 2 days ago
- 2 min read
Saanvi Srivastava, Institute of Law, Nirma University
Shubhangi Tripathi, Institute of Law, Nirma University
ABSTRACT
Securities markets embody methods of trading that have been revolutionized by the process of digitization and in the same process, the efficiencies have been coupled with enhanced accessibility and relatively high chances of fraud. This research paper critically examines the risks of securities fraud in the age of disruption focusing on Insider trading, Algorithmic manipulation, Blockchain fraud, and Cybersecurity threats. These advanced fraud schemes exploit inherent inefficiencies and technological dynamics that render traditional analysis challenging. The paper discusses the challenges of managing enormous and varied data sources, such as emails, trade history, and financial reports, as well as the risks of missing or tampered digital evidence. Insider trading and its covert nature are specifically cited as being nearly impossible to combat, and a surge in cybercrimes that involve hacking securities platforms to enable fraudulent transactions or illegal information breaches is also cited as an almost insurmountable security challenge. The study analyses current laws that deal with these issues, such as the Information Technology Act of 2000, the Securities and Exchange Board of India Act of 1992, and certain international enactments.
The study emphasizes the need for a more comprehensive practice involvement and identifies shortcomings in the current regulatory frameworks by examining case studies and analyzing significant judicial precedents. Thus, the doctrinal approach is used as the research methodology and involves the analysis of case law, legal doctrines, and provisions to establish the issue at hand. There is a need to encourage the use of advanced forensic techniques and modern technology for the development of particular guidelines and regulations of blockchain technologies, and the bolstering of cybersecurity in fraud detection and prevention systems to implement more effective practices.
The research highlights the urgent need for a cohesive strategy to combat digital securities fraud and offers practical recommendations to improve technological, legal, and regulatory solutions. The study aims to promote greater trust and transparency in securities markets around the world by bridging the gap between new challenges and current solutions.
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