Essay about Annotated Bibliography On Insider Trading

2049 Words Nov 24th, 2014 null Page
Introduction to Insider Training:
Insider trading, usually referred with the negative connotative meaning, is the trading of non-public information among shareholders to gain a personal profit or prevent any possible losses. The violation of this practice can be denoted by stating that “Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security” (“Insider Trading”, 2014), in which infractions include “revealing non-public company info to major shareholders who, in effect, withdraw large amounts of stock. Although there are a few benefits of insider trading such as creating stability, producing accurate pricings, and provides gains/ no losses for both parties, the consequences still largely outweigh. Some consequences of insider trading include questions of liability, decreases in investor confidence, harms of shareholders, reduced liquidity, and an unequal trading field. Moreover, the STOCK Act of 2012 prohibits insider trading to “Members of Congress and congressional employees (including legislative branch officers and employees), as a means for making a private profit, of any nonpublic information derived from their positions as Members or congressional employees, or gained from performance of the individual 's official responsibilities” ("S.2038 - STOCK Act, a bill on OpenCongress", 201). So, based on the…

Related Documents