Insider Trading Legality

Term Paper # 117741

Accounting > Financial
Business > Law
Criminology

This paper provides an analysis and evaluation of the issue of insider trading legality.

2,773 words () | 7 sources | APA | 2009 United States

Paper Summary:

In this article, the writer focuses on the legality of insider trading. Specifically, general laws for insider trading are discussed, along with variances of legal precedence in different geographic locations. The writer also looks at the recent case study of Martha Stewart and insights established by conducting this research. Finally, portraits of when insider trading is considered practical, ethical, and legal highlights overarching details of this analysis.

From the Paper:

" Overarching guidelines maintain that insider trading can be either illegal or legal. Here, the determining factor answering the question of legality is timing. Two basic options guide the regulatory investing process in regards to insider trading. First, insider trading is viewed as illegal when the public has not received the information in regards to the entity. This legality displays fairness across the board to all potential investors, and alleviates the edge that insiders could have without sharing all information. Of particular note in this case is that those that are privy to inside information could also be considered guilty of this crime for tipping outside individuals or organizations, as well as the investors themselves. There have been many cases where all parties involved - family, directors, brokers, etc, have been found guilty of insider trading for tipping."

Sample of Sources Used:

Aktas, Nihat. et al. 2005. Legal Insider Trading and Stock Market Reaction: Evidence from the Netherlands. Retrieved on Dec 5th, 2007. http://www.uclouvain.be/cps/ucl/doc/core/documents/COREDP200767.pdf
Forbes Media Investopedia: Insider Training. 2007. Retrieved on Dec 4th, 2007. http://www.investopedia.com/terms/i/insidertrading.asp
Haddock, David D. 2002. Insider Trading. The Encyclopedia of Economics. http://www.econlib.org/library/Enc/InsiderTrading.html
Hoffman, Drew. 2007. Martha Stewart's Insider Trading Case: A Practical Application of Rule 2.1. Georgetown Journal of Legal Ethics. http://findarticles.com/p/articles/mi_qa3975/is_200707/ai_n19511828/pg_1
Kattoulas, Velisarios. 1997. Insider Trades in Japan Leave Persistent Stain on the System. International Herald Tribune. Retrieved on Dec 5th, 2007. http://www.iht.com/articles/1997/02/25/insider.t.php