An Argument Against Insider Trading

When assessing the economic damage to due to Paul Thayer and those that he tipped off about the acquisition of Campbell Taggart, it should be noted that some argue that this kind of insider trading circulates information and forces the stock to its “true value.” If we assume this argument to be flawed, then part of Anheuser-Busch stock dip after the announcement was due to the insider trading and the fact Anheuser-Busch probably paid more to acquire its target. Thayer and his friends trade the Campbell stock for nearly a month before any public announcement of the merger. On July 27 nearly half the volume was insider volume controlled by those individuals who were in violation of rule 14(e)-3 (See exhibit 2). The increased volume might

Fraud, lying, conspiracy...not terms that any individual generally wants associated with their history, nonetheless with their reputation and personality, especially if that individual happens to be Martha Stewart. Martha Stewart: a name which almost every person who calls themselves an American can recognize. Her name pronounces itself across cookbooks, magazines and even has its own show on Style and The Learning Channel. It now pronounces itself with yet another captivating theme, as part of one of America's major scandals.

Insiders have immediate access to huge amounts of valuable company information and can misuse their privileges or imitate someone else with higher privileges to plant a virus, copy information, or to infect research data. The main idea for insiders to sell out to a competition are: lack of loyalty, disgruntled, boredom, mischievousness, blackmail, and very important, money.

Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused

Insider trading – insider trading is the trading of a corporation’s stock or other securities by individuals with potential access to non-public information about the

The U.S. Securities and Exchange Commission (SEC) is in place to ensure that people who invest in publicly traded companies are protected, and that an efficient market is maintained in a fair and orderly fashion. The SEC has put in place several laws and rules to ensure that all investors have access to certain financial information before they buy stock in a company. This information is to remain public and readily available as long as the company is publicly traded. This means that the companies that are publicly traded must disclose this financial and other related information to anyone who requests it. Most companies have it posted online on their company website. These rules and laws ensure that investors are making informed decisions both before they buy stock and the entire

The stock market is a great way to buy part of a company & gain or loose money depending on how the company is making money buy buying a share. “The stock market is owning a small piece of the company; the stock market is owning a piece of a business” (Christie 5). Therefore, investing in the stocks is a great idea when prices are high. Furthermore, it is a hard job to keep up with everything needed to know for the job. Investors and brokers are the one who do the buying

Insider trading has brought competition to the market place by giving shareholders, private investors, and other interested individuals the opportunity to bring in revenue. The average American household lives paycheck to paycheck. The stock market opens a new world for those individuals that are wanting to own electronic currency or a tangible good. This can also create another source of income for them as well “…the long-term investors who hold their stock will share in the price rise that good news will bring, and their holdings will be worth a greater amount in the market” (Henry B. Manne, Insider Trading and Stock Market (1966) p.457). Another benefit that insider trading bring, is it that creates new competition in the market for companies to strive more on making their product worth more. Therefore, their stock will be worth more as the company continues to rise above the

We chose Bernard Madoff’s case because we thought that we could relate his case to many unethical behaviors. The analysis can be made on decision making and lack of ethical training which we think is an important topic to focus on this course.

Insider dealing has been affecting the efficiency of stock markets in different places like United States, United Kingdom and Australia. Hong Kong is of no exception. Basically, insider dealing refers to the trading of a corporation’s stock or other securities by individual with potential access to non-public information of the company. The law of insider dealing in Hong Kong provides a much more detailed definition and is very comprehensive. However, when it comes to enforcement, it seems not very effective. In the following, the law of insider dealing in Hong Kong will be summarized. After analyzing the comprehensiveness of the law, the underlying reasons of the difficulty in enforcement will be identified. Some

For example, Manna (1966) states that insider trading should be allowed because insider trading is the most effective way to compensate to insider to generate new economic information in firm. Hirshleifer() states that for insider, good information is as good as bad information to make profit but this profit may not be related to economic contribution of insiders in corporate. Proponents of insider trading suggest (Carlton and Fischel (1983) that insiders are the most informative member in the market, and by trading, they bring new information to the markets and causing prices to change toward their true value and, therefore, promoting the optimal allocation of resources. On the other hand, Scholars (Benabou and Laroqu, 1992) say that insider trading may provide incentive to corporate insiders either to delay the announcement of price-sensitive information to public or to prevent to release price sensitive information, which in turn makes stock prices less informative. However, Georgakopoulos (1993) argues that restriction on insider trading may have little adverse impact on market efficiency but it reduces the cost of transaction that burdens on uninformed traders

If there is one thing to avoid while being a stockbroker it is fraud! Fraud is simply the deliberate trickery of deceit in order to obtain a profit or dishonest advantage over someone. In each brokerage firm there are a select few of individuals that operate under the Securities and Exchange Commission (SEC) to oversee the legal and illegal activities of a corporation. Jordan Belfort was responsible for training his employees to intentionally lie to clients as a means of earning substantial amounts of money. For

Corporate directors and officers often obtain advance inside information because of their positions. Sometimes the information can affect the future market value of the corporate stock. It is obvious that their positions can give them a trading advantage over the general public and shareholders. Often times the insider is the company manager; other times it is the company's lawyer, investment banker, or even the printer of the company's financial statement. Anyone who has knowledge before public dissemination of that information stands to benefit from good news or bad news.

Insider trading refers to the trading of a listed company’s stock or other financial securities by individuals who has access to non-public material information about the company. This action often occurs within employees/ex-employees of the listen company. Information is considered to be non-public material information if making it public would affect the price of securities, and using such information in decisions to buy or sell financial securities would be unfair to non-insiders (Bainbridge, 2013). Insider trading is treated as a mischief in more than 90 countries, and defendants are imposed with penalties (Beny, 2012). Specific insider conduct regulations in New Zealand were first enacted in 1988, followed by amendments in 2002, 2006 and 2008. The insider conduct regimes between 1988 and 2008 are often considered as a failure due to weak enforcements. Thus in 2008, the regulator introduced a new regime, which was a close model to the Australian insider conduct legislation. Both regimes are expansive, meaning it could be applied to any person in possession of insider information. However, while the Australian laws were aggressively enforced (more than 26 prosecutions were brought since then), no prosecutions have been launched under the new legislation in New Zealand. In addition, New Zealand also had no convictions secured prior to 2008, illustrating a clear enforcement deficit in the New Zealand

FI’s with large shareholdings are better apt at influencing the performance of investee firms in their portfolios by being a quasi insider and creating knowledge advantage using private information gained through regular meetings (Holland, 1999). Through cooperative means FI’s are able to probe, monitor and direct the corporate strategies, management and financial performance without direct intervention. Private and informal influencing is favored to public interventions as it may affect reputation of all parties involved.