Business Ethics Issues Involved in Insider Trading Dow Jones analyst Jack Hough, “it is a crime to trade based on information that can influence returns (“material”) that isn’t available to ordinary investors.” Hough said that this is “insider trading.” Hough said that the term “insiders” is a term for “company executive, board members and key stakeholders.” Hough emphasized however that these people “are permitted to buy and sell shares so long as they report their transactions.” However, the illegal form of “insider trading needn’t be committed by insiders.” Hough said that insider trading takes place “when they are based on privileged information” and th…
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company leaking information to outsiders on the deals and handshakes taking place inside the firm and with the firm and parties outside the firm. If insider trading is prevalent, why must we consider the ethical aspects of insider trading? According to Joseph Des Jardins, “unlike some business disciplines, there is no single answers in ethics, no single body of information, nor even a single framework for thinking about ethics” (9). ...
It will make business ethics beyond definition thereby depriving businessmen of a tool with which to marshal their companies along line that will promote profitability and business sustainability. Businessmen are neither philosophers nor academics although they have to study philosophy and the academic sides of a business. They are not individuals who muse by the hour and become contented and fulfilled with their musings. They are not philosophers who simply reflect on life and derive satisfaction the longer the hours they spend on reflection. Businessmen are not academics out to grasp theories and advance knowledge: businessmen thirst for knowledge just like academics but they are principally users of knowledge. Businessmen may advance knowledge as they advance their business in the same way that computer, internet, and information technologies have advanced as a result of business activity. However, advancing knowledge is not the businessman’s objective but making a profit. Of course, businessmen derive satisfaction as his or her business grows, take a leading role in the industry, employ an increasing number of employees, become recognized in society, and becomes a power or at least influential in society as his or her business shape society’s lifestyle, and outlook in the same way that the businesses of Bill Gates transformed the lives of people in the 21st century. Businessmen are individuals out to make profit and survive in the competition of business. Therefore, the appropriate or relevant perspective on ethics is that one that should enable them to make profit, survive in the competition, survive in society, and if possible be ahead of the competition if not society as a whole. On the other hand consumers are becoming critical of
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“Business Ethics Issues Involved in Insider Trading Essay”, n.d. https://studentshare.org/business/1393655-business-ethics.
It is considered to be legal by most countries, but only in the case that it does not harm the company and its profit making in any way. The insider traders are mostly the officers, key employees, directors and other shareholders who may gain such authentic information. But this very term, insider trading, also have negative connotations
Society always has a difficult time trying to identify which groups are out for their immediate needs. Organizations that are in place to identify how businesses conduct their operations are also under close scrutiny. This is to measure if the work they are doing is commendable, or they fall under the same category as the perpetrators of white collar crimes.
Insiders, who have only been identified as a “GS account”, had information about the acquisition of Heinz by Warren Buffet suddenly bought several shares of the company and the increased demand of the shares caused an upward surge of more than 7.5 percent in the shares of the company which had been consistently trading at the same price level for the past several months.
If one were to be ethical, one ought not to involve in business. If one were business-minded, ethics would have no place. In the contemporary world, profit is not the be all and end all of organizations. Businesses are looking at long term implications for their transactions.
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" (2006).
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.
Moral issues in the workplace center on obligations to the firm, abuse of official position, bribes and kickbacks, obligations to third party, whistle blowing, and the question of self-interest.
1. Employees obligations to the firm are established through the work contract to