Consider this: "Imagine a boardroom of corporate executives, along with.
lawyers, accountants, and investment bankers, plotting to take over a public .
company. The date is set; an announcement is due within weeks. Meeting .
adjourned, many of them phone their brokers and load up on the stock of the .
target company. When the takeover is announced, the share price zooms up and .
the lucky 'investors' dump their holdings for millions in profits." First .
things first - insider trading is perfectly legal. Officers and directors who .
owe a fiduciary duty to stockholders have just as much right to trade a .
security as the next investor. But the crucial distinction between legal and .
illegal insider trading lies in intent. What this paper plans to investigate is.
the illegal aspects of insider trading. What is insider trading? According to .
Section 10(b) of the Securities Exchange Act of 1934, it is "any.
manipulative .
or deceptive device in connection with the purchase or sale of any.
security." .
This ruling served as a deterrent for the early part of this century before the.
stock market became such a vital part of our lives. But as the 1960's arrived .
and illegal insider activity began to pick up, courts were handcuffed by this .
vague definition. So judicial members were forced to interpret "on the.
fly" .
since Congress never gave a concrete definition. As a result, two theories of .
insider trading liability have evolved over the past three decades through .
judicial and administrative interpretation: the classical theory and the .
misappropriation theory. The classical theory is the type of illegal activity .
one usually thinks of when the words "insider trading" are mentioned.
The .
theory's framework emerged from the 1961 SEC administrative case of Cady .
Roberts. This was the SEC's first attempt to regulate securities trading by .
corporate insiders. The ruling paved the way for the traditional way we define .
insider trading - "trading of a firm's stock or derivatives assets by its .
Contrary to public perception; most insider trading is perfectly legal. ... In the United States, insider trading has been illegal since 1934. ... The SEC regards the practice of insider trading as unfair to investors. ... Some people believe that insider trading should be permitted. ... Additional reasons for permitting insiders to trade exist as well. ...
Insider trading is one of the most common white-collared crimes committed. ... Insider trading is very lucrative and can make the person quick money or not lose money. ... Martha Stewart is an example of an insider trading scandal. ... Enron is a good example of why insider trading is a bad crime. ... Insider trading is not a small or harmless crime. ...
Insider trading has become a hotly contested issue in corporate North America. ... Applying both teleological and deontological theories of ethics and by discussing the article on insider trading by Jennifer Moore, I will show that insider trading in all its forms is unethical. ... Insider trading can happen with both negative and positive information. ... Waksal was found guilty of insider trading and was sent to prison for 7 years. ... However, in the case of insider trading this is impossible as if insider trading were practiced by everyone the stock exchange could not work as it does to...
Insider trading, a notion usually coupled with thoughts of illegal behavior, in reality involves both legal and illegal activities. ... The consequences of insider trading are, by and large overlooked and scoffed at, and can be relatively severe for both the insider disseminating the information and for the company they are employed by. ... The two were charged with insider trading on June 12, 2002. ... This issue is the basis for the revised SEC rules and regulations surrounding insider trading and other accounting fraud practices. ... Adversely, the utility theory can be applied negative...
Unfortunately the problems did not end with insider trading. ... The second compromise is less obvious: Insider trading. ... A second argument for insider trading lies in the efficiency of a market. ... Despite of all these arguments regarding in favor of insider trading; the rules of the SEC are clear and insider trading is not allowed. ... Whether or not insider trading is good for the market is still in debate. ...
His character is supposedly based off the life of Ivan Boesky, the "infamous Wall Streeter " who profited on severe amounts of insider trading. ... Just as Boesky "wanted an edge, " Gekko and Bud "cheated and traded off of exclusive, inside information " (Meserve). ... Boesky's career was ruined when the authorities caught him trading with insider information, and although he was able to make a sweet deal in exchange for names of others who benefitted from this malpractice, he lost his company, his wife and family, and so much more in the process. ... This decisive moment ultimately lea...
His character is supposedly based off the life of Ivan Boesky, the "infamous Wall Streeter " who profited on severe amounts of insider trading. ... Just as Boesky "wanted an edge, " Gekko and Bud "cheated and traded off of exclusive, inside information " (Meserve). ... Boesky's career was ruined when the authorities caught him trading with insider information, and although he was able to make a sweet deal in exchange for names of others who benefitted from this malpractice, he lost his company, his wife and family, and so much more in the process. ... This decisive moment ultimately lea...
In my opinion, the federal government decided not to charge Martha with insider trading for what may be lack of hard evidence. ... Waksal pled guilty and was sentenced to more than seven years in prison for insider trading related charges and tax evasion. ... The federal government faced a very difficult task in proving the insider trading charges and thus decided not to charge her. ...
The Act also empowers the SEC to require periodic reporting of information by companies with publicly traded securities. ... These provisions are the grounds for many different types of disciplinary actions including fraudulent insider trading. Insider trading is illegal when a person trades a security while in possession of nonpublic information. ... The Investment Company Act of 1940 regulates the organization of companies, including mutual funds, that deal mostly with investing, reinvesting, and trading in securities. ... Infractions that the SEC deals with include insider trading...
