Insider Trading Examine the Strengths Essay

Total Length: 417 words ( 1 double-spaced pages)

Total Sources: 1

And the ability to know when to sell shares made the executives careless in their management, as they would know when they could "cut their losses."

Critics of insider trading laws would contend that the problem with Enron and WorldCom was insufficient oversight of these corporation's accounting procedures, not insider trading. The criminal behavior was not the fact that key executives knew when to buy and sell their shares, but their manipulation of company profits. Even many sophisticated investors were duped. And finally, the credit crisis of 2007 shows how no human being can perfectly predict market behavior, and is often duped by misleading indicators.
Inside information is no guarantee of financial largess.

Legally, insider trading can be difficult to prove -- it must be demonstrated that the person sold their stock in an irregular fashion based upon non-public information he or she demonstrably possessed prior to the "fire sale" of his or her shares. However, this is not an argument against the legal prohibition on the practice, necessarily: simply having the law in place may prevent egregious use of inside information by investors.

Reference

Boatright, John. (2009).Ethics and the conduct of business. 6th edition. Prentice….....

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