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Ethical Analysis of Insoder Trading


            In recent months corporate America has found itself placed under the microscope of scrutiny and interrogation in regards to their chosen behaviors surrounding selected accounting practices and ethical standards regarding violations opposed to federal accounting laws enforced by the Securities Exchange Commission (SEC). The laws that encapsulate securities are not new to our business culture, they have been around since the Stock Market Crash of 1929, but as with anything, they have evolved though the years to stay congruent with modern-day norms and values. Insider trading, a notion usually coupled with thoughts of illegal behavior, in reality involves both legal and illegal activities. The legal portion involves corporate insiders; i.e. directors, officers, and employees, who buy and sell stock in their own companies. More commonly " insider trading refers generally to trading in a company's stock while in possession of material, non-public information about a company that will, when released, have an impact on the company's stock price" (Reid). Allegations and/or formal charges that surround fraudulent accounting practices have a devastating impact on a company, ranging from a tarnished reputation, hopefully, which can be fixed with time, to being a memorable company of the past. Chronicled by the ruin of Enron, the disappearance of Arthur Anderson, and most recently Martha Stewart and her dealings with ImClone Systems- discussed in a Wall Street Journal article published in the October 22, 2002 edition, entitled "Martha Stewart Is Given Notice Of Possible Charges by the SEC", investigations are running ramped in the corporate American world. .
             To many, insider trading conjures images of high-level secret and underhanded meetings among executives involved in complex and convoluted mergers.


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