Insider Trading Risk Assessment Research Paper by writingsensation

Insider Trading Risk Assessment
A discussion regarding the legalities of insider trading.
# 74993 | 2,248 words | 6 sources | MLA | 2006 | US

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This paper discusses how insider trading is usually inclusive of both legal and illegal conduct and also defines what forms of insider trading are legal and which are illegal, as well as the risks involved with both. This paper also discusses the importance of communication in assessing the risk of insider trading.

Identify the Risks to Individuals and/or Organizations
Analyze the Risks
Discuss Impact, Probability and Time Frame
Classify Risks and Prioritize Them
Discuss Financial Reporting, Operational and Compliance Risks
Discuss the Importance of Information Sharing to Develop Risk Assessment Models.
Discuss the Legal Boundaries, Including Privacy Issues.
Discuss Risk Mitigation Strategies.

From the Paper:

"In general, the legal view is that insider trading prevails while a person has "material, nonpublic information" regarding a security or its issuer and buys or sells that security. The SEC has specified that an individual with such inside information has to move away from trading in the securities of the company or correctly reveal what he or she knows even before buying or selling them. Those who violate these rules are subject to civil penalties of about three times the illegal profits which are being gained or losses prevented by the insider trading in addition to criminal penalties. Criminal penalties for individuals may mean a fine of as about $5 million, prison as long as 20 years or even both. Courts have also allowed injured private parties to sue for the purpose of damages. (Ivancevich; Jones; Keaveney, 2002) Thus the penalties or risks are now pretty severe."

Cite this Research Paper:

APA Format

Insider Trading Risk Assessment (2006, November 15) Retrieved July 05, 2022, from

MLA Format

"Insider Trading Risk Assessment" 15 November 2006. Web. 05 July. 2022. <>