Insider Trading Regulations And The Enforcement Deficits Essay

The US Securities and Exchange Commission (SEC) is the US federal agency that holds the primary mandate to enforce federal securities laws and regulations to control the securities industry and the country’s stock exchange and regulation of all activities and organizations including the US electronic securities market. The SEC is committed to promoting a market environment that yields public trust characterized by integrity to attain its mission of protecting investors through maintenance of fair and efficient markets through facilitation of capital information (Basagne, 2010). The SEC financing is a major area of focus since there has been major concern regarding the SEC agency financing and whether they utilize the

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.

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

Throughout history and in our own time, legitimate accounting methods have been utilized to fraudulently engage in manipulating activities that results in illicit gains to the perpetrators and losses to individuals and financial institutions.

In the past, many corporate executive have committed various forms scandals in their organizations. Such fraudulent arts are unethical and immoral behavior. This led the US government to form legislation in order to control fraudulent activities; mostly performed by senior officers in the organization. In view of this, this paper will address the following: historical summary on SOX enactment, the key ethical components of SOX, social responsibility implications regarding mandatory publication of corporate ethics, whether the criticisms of SOX implication presents an unfair burden on smaller organizations and suggestions on the improvement of SOX legislation.

Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company. In various countries, trading based on insider information is illegal. A great example for that is when “R. Foster Winans: The Corruptible Columnist Although not high-ranking in terms of dollars, the case of Wall Street Journal columnist R. Foster Winans is a landmark case for its curious outcome. Winans wrote the "Heard on the Street" column profiling a certain stock. The stocks featured in the column often went up or down according to Winans' opinion. Winans leaked the contents of his column to a group of stockbrokers, who used the tip to take up positions in

The United States has one of the biggest and fastest growing economies of the world. Our financial system has been affected by numerous crises throughout the years and as a result Congress has reacted in the most recent times and two well-known acts have been signed into laws by the presidents at the time to protect investors and consumers alike. A brief overview of the Sarbanes-Oxley Act of 2002, a discussion of some of the provisions therein, opinions of others regarding the act and also my personal and professional opinion will be discussed below. The same will be examined about the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Glass Steagall Act was passed on 1933, which is also known as The Banking Act to tighten regulation on the way banks did their business. This act was written as an emergency measure when about 5,000 banks failed during the Great Depression. Banks mostly failed because of the way they would invest with money. The act prohibits banks from investing money on investments that turn out to be risky. Banks could no longer sell securities or bonds. The act also created Federal Deposit Insurance Corporation (FDIC) to protect the deposits of individuals, which is still used to this date. The FDIC in this era insures your deposits in your bank up to $250,000. This gave the public confidence again to deposit their money in the bank. In 1933

1)“insiders may not trade on a stock exchange upon the basis of material information until that information has been made available to the general investing public“(Feuerstein , 1970, p.30).

The stock market is the market where shares of publicly owned companies are issued through exchanges or over-the-counter markets. Some individuals, such as R. Foster Winans, will attempt to cheat the stock market and make profits illegally through insider trading. Insider trading is an illegal activity where people will trade stocks based on confidential information. R. Foster Winans was charged with insider trading because of his knowledge of what would appear in the Wall Street Journal’s, “Heard on the Street Column.” R. Foster Winans got the punishment he deserved for insider trading on the stock market.

The Sarbanes-Oxley Act, or SOX Act, was enacted on July 30, 2002. Since it was enacted that summer it has changed how the public business handle their accounting and auditing. The federal law was made coming off of a number of large corporations involved in scandals. For example a company like Enron was caught in accounting fraud in late 2001 when the company was using false financial statements. Once Enron was caught that had many lawsuits filed against them and had to file for bankruptcy. It was this scandal that played a big part in producing the Sarbanes-Oxley act in 2002.

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

It can fairly be said that an Investor considering an investment decision (whether to purchase, sell or hold stock) in publicly traded company acts on the basis of extensive information which is available by corporation to him until the last moment of his investing decision and try to determine the fair price of corporate stock. In the light of continuous creation of a particular impression of corporate affairs by the corporation, new information by corporate can vanish the importance of previous available information to investor. In the scenario only one kind of investors can get advantage over others, who is either very close to corporate operation (corporate officers) or can access nonpublic price-sensitive information to corporation

The Stock Market is an organized market for the trading of stocks and bonds. In Europe a stock exchange is often called a bourse. Stock exchanges exist in all-important financial centers of the world. Members of an exchange buy and sell for themselves or for others, charging commissions. A stock may be traded only if it is listed on an exchange after having met certain requirements. The New York Stock Exchange (founded 1790) is the largest in the U.S., handling more than 70% (in market value) of all transactions. The American Stock Exchange (Amex), also in New York City, and regional exchanges account for the remainder. Unlisted shares, often of smaller companies, are traded in the growing over-the-counter

Securities regulations began in 1933 as a reaction to securities market violations. Securities regulations are a balance of investor and issuer interests. Regulations have typically been enacted in reaction to a violation that affects many, including issuers, investors, and the public. These regulations are not only created in reaction to violations, but the legislature also attempts to take a bigger step in prevention of the same violation reoccurring, as well as preventing a violation that has yet to occur. In other words, securities regulations have always been on a mission to stay one step ahead of securities violations from both issuers and investors. Regulations tend to tighten the rules to ensure investors and issuers do not have