The Enforcement of Tort Law in Robo-Trading Investment Frauds Legal Protection and Compensation for Investors in Indonesia

Abstract

The rise of fraudulent robo-trading platforms in Indonesia has led to significant financial losses for investors, exposing gaps in the legal system’s ability to protect victims. While criminal prosecution remains the dominant response to such schemes, civil remedies, particularly through tort law under Article 1365 of the Indonesian Civil Code, offer a potentially powerful, yet underutilized, legal pathway for victims to seek compensation. This paper analyzes the applicability of tort law in cases of robo-trading investment fraud, focusing on the elements of unlawful acts, causality, and restitution mechanisms. It explores key challenges including evidentiary barriers, the lack of collective legal action mechanisms, and the difficulty of asset recovery, particularly in cross-border contexts. Despite these challenges, the study finds that tort law remains relevant in supporting investor protection, especially when courts are willing to recognize digital evidence and systemic patterns of deception. The paper concludes by offering practical recommendations for improving the effectiveness of civil legal remedies, such as enhancing digital evidence procedures, introducing class action mechanisms, and promoting cross-border legal cooperation.