Further, compulsory timely disclosure of inside information could be an alternative enforcement since inside information is only valuable before being made public (Zhang, 2014). In conclusion, various recommendations have been mentioned, which require financial institutions and government to cooperate and establish more sophisticated detection and prevention system. Although this might be resource-consuming, considering the significant harm brought by insider trading, it is more reasonable to focus on cost-effectiveness. Furthermore, in-depth research would be carried out in terms of insider’s ethical standards, the origin of insider trading. (Word count:
Insider trading has received a bad name in the recent decades. The popular press makes it sound as an evil practice where the people engage in are totally lacking of the ethical principles. Particularly all the articles have been written on insider trading that have been treated in the recent years as something as a wrongful act. The exceptions were drawn out by the work of Manne (1966) that people profit from the usage of the inside information such as the tax preparers use the expert knowledge of the tax law to save their clients from the excess money spent on the tax return preparation (McGee R. W., 2007). Arguments have been raised if insider trading is not a fraudulent act and therefore is it legitimate to legalise it?
its economic value arises from the inaccessibility of the information to others who could obtain value from the information. • Lastly, the trade secret holder must use “reasonable measures under the circumstances to protect” the secrecy of the information. Apart from preventing public disclosure, those who have potential access to the secret information should acknowledge its secret nature. These essential principles for trade secret protection are recognized by North American Free Trade Agreement (NAFTA), General Agreement on Tariffs and Trade (GATT), World Trade Organization (WTO) and the national laws protecting trade secrecy around the world.
Consequently, the owner has limited legal powers towards the third party. Only in a situation where the third party knew or should have known that the contract in question is violated, the inventor may have remedies towards the third person, but this is merely an exception than a general rule. Efficient trade secret laws could actually lead to greater knowledge diffusion. The optimal law protecting trade secrets, should result in the allocation of the information to more people, which could lead to more innovation and an increase in human capital, by minimizing the risk of distribution to competitors. Without effective trade secret protection by law, the protective measures taken by the companies having
Tolstedt’s knowledge unless there was a drastic lack of leadership, which in either case should prevent her from taking her riches and running. The author believes the new rules which were created after the banking crisis would allow Wells Fargo to take back the stock options and possible some of her wages, due to her inadequate supervision and subsequent fraudulent activities of her employees. Would it be ethically responsible for Wells Fargo to pull back the monies, due to the fraudulent activities, from the author’s point of view it definitely would be ethical and
Now if that companies products are being counterfeited, that means that sales the company should have been making are less, because people are buying the fake items on the black-market. This will negatively affect the U.S economy because the company will not be able to hire as many people, and the U.S
Moreover, “misconduct is common and accepted by business services professionals, the integrity of entire economic systems is at risk”, states Jordan A. Thomas, partner and chair of the Whistleblower Representation Practice at Labaton Sucharow law firm. In fact, making money at any cost is all what matters, while doing what is right and abiding by the law is not. That said, as a corporate finance student and a business administration major, it is as interesting as important for me to learn about what is considered as unethical in business, in addition to who is enforcing the federal securities laws, proposing securities rules, and regulating the securities industry. B) Unethical Behaviors in Business: Definition To understand what an unethical business behavior means, we must understand what is meant by ethics. Ethics can be
It is costly and takes time for a company to investigate a fraud case. Sometimes when fraud cases are prosecuted, the sentences they receive is very light compared to what they have done to the company. This discourages companies to report fraud. If the company doesn’t report a fraud on the other hand would have many problems. First of which, those who have acted illegally may think that they have not received any consequences to their actions and might repeat their actions in another workplace.
Rather it is considered a very normal transaction. However some regions of the world deem the transfer as illegal in order to assist in the defeat of money laundering, as well as help construct a stable and suffice, functioning economy. The reason that Hawala has now become a very crucial part of the economy is due to the large levels of corrupt ill-gotten blood money that has been distributed into circulation, thus providing the economy with a major threat. In many cases such as India and Pakistan, the economy depends strongly on
Negative impacts discussed here include unfair trade activities and lose of confidence between investors as a result of the leakage of sensitive-information. With the imposition of hard law preventing insider trading activities such as Capital Market & Services Act 2007 in Malaysia, it is hoped that the occurrence of such activity will be at a minimal level. Encouraging trends in adopting soft laws such as company’s policy and/or guidelines for trading activity should be welcomed with open arms in order to promote awareness of the seriousness of this
People who are considering reporting their employer for securities violations under the SEC Whistleblower Program know reporting the possible violations is the right thing to do, yet they still hesitate. It 's difficult to turn in co-workers or supervisors who may also be friends. It 's even more difficult to utilize a company 's own internal reporting system, however, the SEC suggests that people do, unless they have a very good reason not to, such as a fear of retaliation. Employees who utilize their company 's internal reporting system have 120 days to report the information to the SEC: otherwise, it 's not original information. Employees also hesitate to inform the SEC of possible violations because they initially condoned the act and they fear the SEC will say that they participated in the fraud.
Tips and complaints are symptoms of fraud because the other employees and managers who work with the fraudster notice when things are not going normally because of their day to day interactions (Albrecht, 1996). ***trans from red flags to opportunities*** There are several ways opportunites for fraud can be reduced: performing a fraud risk assessment, install controls to prevent and detect fraud, train employees to look for and report fraud, and engage both internal and external auditors to perform an independent check (Albrecht et al., 2012). In addition to auditors, the car dealership could have a CFE assist the auditors. SAS 99 says that CFEs are allowed to help the audit committee and board of directors (nix and