Inside Information: The Enron scandal in 2001

1877 Words Jul 7th, 2018 8 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 …show more content…
If it were legalized, then Chiarella would of continued invest without any problems. There have been times when the government took the liberty to supply a beginning investor with ways on how to invest ones money wisely. Alan D. Jagolinzer, from the Standford Graduate School of Business took the liberty to advise the public on how to invest without getting into legal trouble with the US government. Jagolinzer goes on to say, “One should not observe abnormal trade returns if participants comply with the rule’s proscription that trades be planned absent private information” (Jagolinzer). This quote from his article titled, SEC Rule 10b5-1 and Insiders’ Strategic Trade, illustrates that one should not have abnormal gains if they comply with the rules. If insider trading were legalized in the United States investors wouldn't need to worry about the information received is publicized or non-publicized. This would ease the the pressure off investors and allow them to strategically trade stocks while still using Jagolinzer’s strategized way of investing while still complying with the rules. Many investors argue that insider trading should remain illegal. I feel investors want this for a few reasons. First, it would show abnormal gains of those who use it. Even if it were legalized, many investors wouldn't know how to get the information to use for their personal use. Inside information isn't for

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