This website uses cookies to ensure you have the best experience. Learn more

Insider Trading Essay

1113 words - 4 pages

Insider Trading

In our economic economy today, we have gotten a few high profile cases were people have tried to make money by using illegal tactics, and these are illegal tactics are based on the insider information. These high profile cases were on Martha Stewart and President George W. Bush. This is why I chose to write my paper on what exactly “Insider Trading” is. Insider trading has to do with stocks, on the stock market. The stock market is basically an organized place where stocks and bonds are traded. The members of this exchange usually buy and sell the stocks for others while charging a commission for doing this work for their clients. Although more and more people are now trading online stockbrokers are not as in demand for their services as they once were which is why Charles Schwab investment firm has laid off more then 1800 workers in this past month, which amounts to a 10 percent reduction in the work force. There are certain limitations on stocks before they can be traded and listed on the stock market. The New York Stock Exchange (NYSE) the largest in the United States was founded in 1970 and handles over 70% of all trades. Then there is the National Association of Securities Dealers Automated Quotations (NASDAQ) which is the fifth largest stock trade in the world. On the stock market there are a lot of illegal things that go on that are unethical. The most known crime that goes on is insider trading scandals. The way insider trading occurs is when one person or many people have information on a company that the rest of the public doesn’t know of and use it to make a profit on the stock market. This trading in the United States has been illegal since 1934 and is protected by the Securities and Exchange Commission (SEC). This requires all companies to disclose statements to the public before offering any securities on the public market. The SEC views insider trading unfair to the investors. The SEC also regulates stock exchanges, brokers, and dealers in securities, and also sets the margins for bank credit in security trading. So basically the law prohibits “insider trading”, the way insider trading happens is when corporate directors and officers find out information on their company because of the position they hold before anybody else does is known as inside information. This information can and probably does have an impact on the company’s future on the market of value. So it is obvious that their position in the company gives them an edge over the public and other shareholders. It is not always the corporate directors and officers that who find out this information first it can range from the lawyers to the person that prints out the companies’ financial papers. Basically anybody who has knowledge of a companies future weather in being good news or bad, the person can profit from it. This person can often make profits trading stocks by using the inside information he has to guide his...

Find Another Essay On insider trading

Insider Trading - Raj Rajaratnam Case

2165 words - 9 pages Insider Trading - Raj Rajaratnam Case Starting as early as the 17th century, insider trading was being used in the European Stock Exchange. (5) This was a place where the government could buy or sell off a security such as a bond. (3) In 1789, William Duer was appointed as Assistant Secretary under the first Secretary of Treasury, Alexander Hamilton. William was the first individual to use the information he gained from working as

Case Study: Issue: Insider Trading

728 words - 3 pages about but was unable to take advantage of because of financial difficulty.Issue:Was Bob in violation of rule 10b and 16b?Rule:10b- Anybody who is an insider must not trade on the basis of inside or non public information to anyone else who is not possession to.16b-Prohibits anyone who owns 10% or more of a corporation from trading stock of that corporation within six months of a transaction. (West 433)Application:Whether Bob was wronged by his

Insider Trading: SEC v. Mark D. Begelman

819 words - 4 pages Slams Insider Trading Case As ‘A Horrific Example’ Of How Government Works.” Business Business Insider, Inc., 16 Oct. 2013. Web. 2 Feb. 2014. Gehrke-White. “Former Office Depot exec pays $30K to settle insider trading charges” SunSentinal. 23 Apr. 2013. Web. 2 Feb 2014. Maglich, Jordan. “Former Office Depot COO Charged with Insider Trading.” LLC, 22 Apr. 2013. Web. 2 Feb. 2014. Securities and Exchange Commission. SEC Complaint Case 9:13-cv-80396-XXXX 2013. SEC Digital Archive. Web. 2 Feb. 2014

Insider Trading In Stock Markets And SEBI

10058 words - 40 pages letters and refund orders before the due date.h)Non-adherence of provisions of the Companies Act and other relevant Acts.i)Violation of rules and regulations of the stock exchanges and listing requirements.j)Absence of fair practices in trading in the market such as rigging of shares, manipulation of prices, insider trading and a large spread between the bid and offer prices.k)Delay in delivery of shares and in making payments for sales by the

Insider Trading and White Collar Crime

1477 words - 6 pages There are many different forms of fraud, and one of the more interesting ones is insider trading. Insider trading like many other forms can involve big social networks, and small social networks. The corporate crime that is being committed is that a person or group of people misuses certain information, when they have an obligation to keep that specific information confidential. This can be effortlessly seen in examining the case involving

Tugas Analisa Etika Insider Trading - FE UAJY - Homework Assignments

938 words - 4 pages Etika Bisnis Insider Trading Disusun Oleh : Albert Garis Senopati Definisi Insider Trading Insider Trading adalah sebuah tindakan pembelian atau penjualan saham perusahaan mengenai informasi dalam perusahaan. Maka dengan kata lain kegiatan atau tindakan insider trading adalah suatu tindakan pencurian informasi perusahaan yang kemudian diperjualbelikan oleh pihak luar atau digunakan untuk kepentingan pribadi oknum yang terlibat. Undang-Undang

Impact of insider trading on business ethics in the Union Bank of Switzerland

3048 words - 12 pages other banks, through straight buy outs or by assimilation of other banks. Currently a multinational company having offices all over the world, it is a global leader in the banking industry.This report analyzes the business ethics of insider trading and the consequences that Union Bank of Switzerland had encountered a few months ago. The company was involved with financial fraud, which included rogue trading in there London, based office. The


1105 words - 4 pages been considered as a violation of market efficiency. The main objective of this study is to determine market reactions around the day of insider trading and the day of announcements on Indian stock market. We are curious to perform our analysis on Indian data because a major chunk of studies on insider trading are concentrated on the U.S data. Therefore, the analysis of India insider trading data provides an independent outcome to compare with

Does Contracts Size Matter?

2115 words - 8 pages The Common perception about the word ‘insider trading’ is that all insiders’ transactions are illegal. This misperception arises because some trades by insiders are illegal while others are absolutely legal. In this study, we study insider trading transactions those are perfectly legal, where the information of these trades is publicly available. The insider trading issue not only attracts finance literature (see, e.g., Lorie and

Inside Information: The Enron scandal in 2001

2314 words - 9 pages Governance Advisor” the STOCK Act was passed on March 22, 2012. The STOCK Act was created to disallow insider trading in the United States, mainly for governmental employees. The act was passed to prohibit the use of non-publicized information for abnormal and obvious gains. While it may be illegal to use insider information, investors still tend to use it. There have been court cases where investors have made millions of dollars using insider

Current Ethical Issues

1418 words - 6 pages IntroductionCorporate ethics are important to all businesses, especially where financial reporting and stock trading are involved. Insider trading, or "the trading of a corporation's stock or other securities by corporate insiders," is an illegal practice that is becoming a concern as corporate mergers and acquisitions become more commonplace ("Insider Trading," 2006). Following is a summary of an article involving the ethical issue of insider

Similar Essays

Insider Trading Essay

1382 words - 6 pages There is a long-lasting debate on whether \emph{insider trading (IT)}, defined as trading in possession of material private information, should be allowed or forbidden and, even now, it is not clear what the optimal IT regime might be. IT regulation, and whether this regulation is enforced, differs across countries. For instance, IT laws are lax in Norway, and Mexico and strict in the US and Ireland; however, there have been enforcement cases in

Ethics On Insider Trading Essay

1015 words - 5 pages Insider trading laws vary significantly from countries to countries. The conduct for the most part associates with illegal conduct. There seems to be general agreement in most countries that the practice is morally wrong. My opinion on insider trading from ethics of duty approach, also commonly known as deontological ethics, is that the practice is immoral. “Deontic” is defined as “of such ethical concepts as obligation and permissibility” and

Martha Stewart's Insider Trading Essay

1538 words - 6 pages own popular television show, From Martha’s Kitchen. She had built the reputation of being a public figure with how-to advice on creations in the kitchen to gardening. Despite these accomplishments, Stewart managed to become entangled in some insider trading scheme that damaged not only parts of her career, but also her public image. Insider trading is the act of purchasing or selling securities based on material, nonpublic information

The Insider Trading Scandal Essay

1311 words - 5 pages been declared illegal for two good reasons. The first reason is simple fairness: it is not nice to cheat at cards, and it is just as bad to cheat innocent stockholders. The second reason is less obvious but perhaps more important: a poker game with a marked deck is no longer a true poker game at all, and, similarly, a stock market permeated by insider trading ceases to be a true market and becomes what it often has been in the rambunctious past, a