<![CDATA[A major threat to the integrity, fairness and sustainability of modern day capital markets is market manipulation. Although the existing legal framework prohibits manipulative practices, law enforcement authorities continue to face sophisticated schemes that disguise artificial transactions as legitimate market activities. The study aims to analyse the effects of market manipulation on the Indonesian capital market, identify the challenges related to the detection of manipulative activities and develop an effective evidentiary mechanism to combat modern forms of market abuse. The investigation applies a normative and empirical legal approach to analyse relevant cases of market manipulation, legal provisions and information through interviews with legal experts, regulators and investigators. The results indicate that the major challenges are the inability to identify the transaction patterns, flow of funds, perpetrator’s intent and the magnitude of the financial damage. Law enforcement authorities often find unusual market activities, but the underlying structure of manipulation is not always completely disclosed. This study proposes a comprehensive evidentiary mechanism involving big data surveillance, cross-institutional data integration, behavioural analysis, modern loss quantification, multidisciplinary expertise and enhanced investigative authority. The paper concludes that a systematic, responsive evidential framework can improve law enforcement, protect market integrity and increase investor confidence.]]>
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