Insider trading is one of the most common white-collared crimes committed. Insider trading is defined as a person who trades stocks with undisclosed information that gives them the upper edge over the public. Insider trading is very lucrative and can make the person quick money or not lose money. It could compare to going to a casino and knowing what the blackjack dealer's cards are before he deals or shows them. It gives unfair advantage over everyone else since you have prior knowledge on the way the stock will move. Many famous and upper class people have used their fame and power to get the major edge on the public.
Martha Stewart is an example of an insider trading scandal. What happens is a person who gives the information is called a tipper and the person who receives the information is called a tippee. In Martha Stewart's case, her long time friend Sam Waksal, CEO of ImClone, gave information to Martha Stewarts" daughter and her broker who then told Martha Stewart to sell her four thousand shares in ImClone. Sam Waksal had prior knowledge that ImClone's cancer drug did not get FDA approval. This information was not given to the public whenever Sam Waksal's friends and relatives including Martha Stewart sold their shares. After the FDA rejection of the drug went public, ImClone's stock dropped dramatically. The public loses money and all the tippee's make money. These actions are very concrete for most of the people involved in the scandal, but insider trading is not easily proved.
There are many loopholes and hearsays that can come with this crime. It is very difficult to prove what information was non-public at the time and people have benefited from the information. There are always defenses of how you overheard information and your stock trading habits. Person can use defenses like "I overheard it in the break room", I read it on a message board, or person who leaks information did not have important duty in the company.
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. ...
First things first - insider trading is perfectly legal. ... 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? ... Chiarella was the first criminal case of insider trading. ...
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...
