Chapter 1 THE CONCEPT OF INSIDER TRADING INTRODUCTION The various frauds and the scandals that take place in the corporate sector, most of them are being committed by the corporate insiders rather than the outsiders. Due to this reason, the regulators all around the world are very much serious to create the regulations and impose harsh penal penalties upon the offenders of insider trading. Being informed is certainly justified, but when such information leads to unfair gain to an individual over others then it is not justified. Exploiting asymmetry of any information is unfair and hence, it forms the basis of the offence of insider trading. When an individual or an organization makes a transaction involving the securities of a company and knowingly that, they are in possession of some confidential information not available to general public and that information is a price sensitive one i.e. it will materially affect its price if available generally, then it amounts to the offence of insider trading. The effect of the practice of insider trading is such that it erodes the confidence of the investors in the equality of the market and is opposed to the fairness of the market as well. Insider trading refers to the use of …show more content…
Then in the year 1986, Patel Committee recommended amendment in the Securities Contract (Regulation) Act, 1956 so that the Security Exchanges could be able to restrict insider trading along with other unfair transactions. Finally, on the basis of Abid Hussain Committee report in 1989, a separate statute to regulate insider trading was decided to be enacted in the form of the Securities and Exchange Board of India (Insider Trading) Regulations, 1992. An amendment in these regulations was done by the SEBI in
While some industrialists were referred to as "captains of industry" due to their significant contributions to the growth and development of the American economy, ultimately, their actions and methods of acquiring wealth and power, such as their monopolistic practices and corruption/bribery, classify them as "robber barons" who prioritized their self-interests over the well-being of society and the economy. The manipulation of markets ultimately ruins the natural flow of the market and results in many advantages for very few already wealthy individuals. John Pierpont Morgan, better known as J.P. Morgan., was an extremely successful industrialist who eventually merged his business with his father's company to form J.P. Morgan and Company. Through
Question 1: Wall Street 1a) Bull Market: this is when share prices are increasing and influences investors to buy. They usually have green indicators or it’s a green arrow pointing up. b) Bear Market: This is when the share prices are decreasing.
The call Martha Stewart had with Mr. Waksal after her conversation with her broker remains speculation. After, placing the call to Martha could have wonder what the reason for selling was. And if in this case Mr. Waksal stated the reasons thus being confidential information that would have been illegal. If Martha Stewart had no previous knowledge she shouldn’t have been hold accountable for inside trading furthermore, this would not be enough evidence for a jury to convict her.
Trader Joe’s is a grocery store chain founded by Joe Coulombe in 1967. It is now privately owned by a trust founded by a German grocery chain. There are currently over 400 Trader Joe’s locations in the United States, plus 38 new stores in the works. The company is headquartered in Monrovia, California. The primary goods are groceries: produce, breads, meats, dairy, frozen foods, non-alcoholic beverages, wine, and more.
One example was the Credit Mobilier scandal where major stockholders of the Union Pacific Railroad formed the Credit Mobilier company and sold their shares to influential congressmen. These executives essentially hired themselves and stole taxpayer money, a very lucrative scandal. Scandals like the Credit Mobilier were widespread and executives from many other railroad companies often stole from their own companies. Many executives would manipulate the rail companies' stocks to profit greatly. Executives would often bribe influential politicians, and work together to profit themselves.
Judging from the article I read I see the term Robber Barons as a perfectly used term. Before the Civil War people were more of a locally relying group. In the process of the Civil war taking place you start having these men that see an opportunity to making small businesses into big corporations. Now, I did say that the term Robber Baron was over used, but I do believe there was a rise of Robber Baron’s in that time period.
TRADE SECRETS A trade secret is the legal term for confidential business information. It can include any information that is valuable to its owner and that the latter wants to keep secret. Trade secret may include customer lists, recipes and formulas, special processes, devices, methods, techniques, business plans, research and development information, etc. In general, protection is sought to safeguard a trade secret from exploitation by those who obtain access through improper means or who breach an obligation of confidentiality.
“Chasing Madoff”, a documentary released in 2010 portrays the way the whistleblower, Harry Markopolos, uncovered Bernie Madoff’s fraud scheme and his ten-year struggle to get the SEC to investigate. The documentary begins with an introduction to Harry Markopolos and his former coworkers Frank Casey and Neil Chelo. The three men work in finance, with investment portfolios. They were aware that in the finance industry there was much talk about an investment company making their customers high returns. Casey came across some investment information from a client of Madoff and gives the information to Markopolos to look over.
Efficiency of financial markets is one of the fundamental issues in finance. The central idea of market efficiency is that market prices of securities represent true value of securities. All relevant information is immediately reflected in the prices causing abnormal profit making impossible in the market. The efficient market hypothesis further implies that prices will move randomly that makes prediction of prices extremely difficult. Efficient market hypothesis requires that investors will be rational and have homogenous expectation.
A) Introduction Unethical behaviors in business affect everyone since you either work in the field or are a consumer of its services. Unfortunately, almost every company usually has individuals who act unethically whether it is for their personal benefit or for the sake of the company they work for. Unethical behaviors in business might be as simple as using company property or funds for personal gain to inside trading and financial fraud. According to The Chartered Institute of Management Accountants, nearly one third of business professionals feel pressured to compromise their ethical standards and are increasingly pushed towards unethical behavior. 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.
Executive Summary Lehman Brothers were an investment bank involved in transactions worth billions of dollars and one of the most powerful investment banks in the world. Lehman Brothers collapsed in 2008 following bad investment in the sub-prime mortgage market and used bad accounting practices called Repo 105 transactions to try and cover up the bad assets. This report sets out the use of the fraud triangle when describing the actions which led to the collapse. The pressure applied on the bank, the opportunity due to the lack of regulation to carry out the actions and the ability of the bank to rationalise their decision making.
Abstract Whistleblowing has now became an important aspect to organizations and it reflects governance aspect of the organization. This paper explains problems faced by Whistleblowers over the world. This paper also deals with the legislations on whistleblower protection in India and why some countries are hesitating to introduce whistleblower protection law. It deals with reasons for such hesitations.
INTRODUCTION A leader is one of the main component of an organization. There is no organization without a leader. A leader is a person who have the power or authority to lead, guide, or command other individual, a team, or an organization. As an organization is a tool to achieve an objective, there is a need of a leader to lead everyone in the organization to achieve the objective.
Stock trading is carried out by stock traders who for the most part need an intermediate such as a brokerage firm or bank to carry out the trades. Stock traders work for themselves by investing money in shares which they believe will increase in value over time and then sell the shares at a later date for profit. There are a number of strategies used by stock traders in order to accumulate profit. The most popular stock trading strategies are day trading, swing trading, value investing and growth trading. A brief description of each of these strategies will now be given
Ethical issues in accounting and finance. Summary This task analysis the issue of ethics in accounting and finance as discussed in the International Journal of accounting and finance. Currently, ethics of any firm is an important topic due to the numerous scandals that have taken place in different countries which have resulted in damage to the economy and society.