Inside Information: The Enron Scandal In 2001

2314 words - 9 pages

The use of insider information is illegal in the United States. Insider information is stock related information that can be obtained many ways to gain large, abnormal gains in the stock market. A popular way to gather inside information is from direct employees of the company. Information on stocks can either be illegal or legal. If the information is publicized for all current or future investors to use, then it isn't illegal. Illegal information becomes unlawful when it becomes privatized from the public, and to be only used by investors in the stock market. The action of using insider information isn’t considered illegal until the information is used in a stock market located in the United States, most commonly the New York Stock Exchange, or NYSE. Investors shouldn't need to worry about whether the information they’re given is illegal. Instead, the government should become lenient and abolish the act that prohibits investors to use insider information. Investors need to come together to protest against congress. If we abolish the act that forbids investors to use inside information, then the economy in general will grow from the freedom given by the government.
Milton Friedman and Adam Smith both had similar ideas when it comes to laissez-faire which is referred to as “let it be economics.” Laissez-faire is a theory which opposes to any government interaction in business affairs. Friedman, an American economist, statistician, and writer who taught at the University of Chicago, believed that, “A laissez-faire government policy would be more desirable than government intervention in the economy” (New World Encyclopedia). Friedman believed in a laissez-faire government policy, because he assumed that it would help businesses thrive in this economy. If the American government take Friedman’s and Smith’s ideas and allow laissez-faire for investors, particularly in inside trading, then it would create a stronger, and freer economy. Freedom in an economy can create economic growth and productivity. Freedom creates this because once someone realizes that a law, or act, has been removed or slightly adjusted, then it brings encouragement to participate in any business affairs that the law, or act, once associated with. If the act that limits an investors freedom of using insider information is removed, the stock market will be gaining new investors to partake in the market. Smith was a moral philosopher whose main goal was to give freedom to business owners, or those who perform business affairs. He believed that if freedom was given to the markets, then it would revolutionize the country drastically. In the US stock market if freedom is given to investors, then companies that trade stocks through the US are better off. Investors would become encouraged to invest knowing that laws are being removed, or changed. With more investors, a larger amount of money is flowing into the market, and into companies, thus thriving them.
The STOCK Act is an act...

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