Posted: December 30th, 2021
Compose a 500 words assignment on insider trading: offensive and defensive causes. Needs to be plagiarism free! Insider Trading: Offensive and Defensive Causes This essay addresses the concept and the causes of insider trading. Insider trading is consideredan issue of immense importance to the business and legal communities. The issue, in effect, is one of honesty and transparency in the conduct of corporate affairs. It is considered so important because this type of security transaction, insider trading, can potentially harm individual investors, industries, and a country’s business reputation.This is a truly global issue.
Insider trading is defined by the United States Securities and Exchange Commission as “buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, non-public information of the security” (“Insider Trading”, 2006: np). A corporate officer, for instance, who uses information known to him, but not to the public, to purchase or to buy securities is generally guilty of insider trading. Exceptions may be allowed for certain transactions which are immaterial or which are reported the United States Securities and Exchange Commission. It must also be noted, however, that the concept of insider trading extends beyond corporate officers and insiders in the technical sense. It also includes people who provide tips to outsiders. This secondary portion of the definition ensures that the primary subjects of the law, corporate officers and fiduciaries, cannot escape punishment by secretly providing information to outsiders and non-fiduciaries (“Insider Trading”, 2006).
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