We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

What were the legal and ethical ramifications of the mid 1980's insider trading scandal - Research Paper Example

Comments (0) Cite this document
Summary
The stock trading of an organization as well as other securities, which include bonds or stock options, by people who have significant inside information about a company is called the insider trading…
Download full paper
GRAB THE BEST PAPER
What were the legal and ethical ramifications of the mid 1980s insider trading scandal
Read TextPreview

Extract of sample
What were the legal and ethical ramifications of the mid 1980's insider trading scandal

Download file to see previous pages... The stock trading of an organization as well as other securities, which include bonds or stock options, by people who have significant inside information about a company is called the insider trading. 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. In the United States, it is incumbent upon the inside traders to publicly declare their trade transactions to the regulatory authority within the given time of business days. However, when the same thing is done based on material nonpublic information while an insider is carrying a duty, it becomes a fraud and a breach of trust. This illegal insider trading, which as a result raises the cost of capital for security issuers lead to a large decline in economic growth. There are ethics officers, who are commonly known as business conduct officers, hired by organizations to protect their interests (Geisst, 2006). “Wall Street insider trading scandal 1980”: This practice has started since the mid-1980s due to constant series of financial frauds, corruption and many abuse scandals which surrounded the US defense industry. To protect and promote the ethical business practices the Defense Industry Initiative (DII) was formed, which set an initial standard for ethics management in companies. One such famous case of an insider trading scandal is that of “the Wall Street insider trading scandal of the mid-1980s”. Its primary player was Dennis Levine who was a managing director at Drexel Burnham Lambert (Newsweek, 1986). The initial charge was filed by the US Attorney Rudy Giuliani which finally led the investigators to arrest Ivan Boesky. Levine built a whole network of professionals in many Wall Street firms who were engaged in insider trading. He maintained an account with a fake name in the Swiss banks subsidiaries in Bahamas because it has some of the hardest bank secrecy laws as compared to anywhere in the world. He did this to be safe from detection. He then had to shift his business in May 1980 to “Bank Leu” which earned him around $10.6 million (Stewart, 1991). But at Bank Leu, the officials there realized Levine’s insider trading activities and banked on him themselves. But they did this collaborative action through Merrill Lynch, which detected a suspicion about trading activities in two other brokers’ personal accounts in May 1985. This started an internal investigation which reached Bank Leu, where due to the bank’s secrecy they had to forward the matter to the SEC “U.S. Securities and Exchange Commission”. It was decided by the bank officials that Levine should give his reasons for such an insider trading, but due to their destroying most of the sensitive documents relevant to Levine’s activity, they were charged with obstruction of justice (Dentzer, 1986). The Bank Leu officials decided to cooperate with the SEC because they noticed a huge gap between the actual managed accounts’ statements and the omnibus records. The stock trading was taken to be distinct from normal banking transactions and hence the bank named Levine guilty as the allegations were proved against him, thus his fraudulent activities led to his arrest. There was a tremendous amount of evidence against Levine related to securities fraud, obstructing justice, tax evasion and a charge of perjury as well. Levine decided to coordinate with the government in order to disclose the names of others who were involved alongside him (Levine and Hofer, 1991). This coordination with the government helped him to have a reduced sentence of two years in prison with a $362,000 fine (Time Magazine, 1987). He also agreed to pay the penalty for these illegal profits as well and also approved of ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“What were the legal and ethical ramifications of the mid 1980's Research Paper”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1411093-what-were-the-legal-and-ethical-ramifications-of
(What Were the Legal and Ethical Ramifications of the Mid 1980'S Research Paper)
https://studentshare.org/macro-microeconomics/1411093-what-were-the-legal-and-ethical-ramifications-of.
“What Were the Legal and Ethical Ramifications of the Mid 1980'S Research Paper”, n.d. https://studentshare.org/macro-microeconomics/1411093-what-were-the-legal-and-ethical-ramifications-of.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Legal/Ethical Issue
Therefore, it is advisable that any organization should have legal and ethical policies that guide the management and employees towards complying with legal and ethical requirements (Key, 1998). One of the main ethical issues that relate to work environment is sexual harassment.
10 Pages(2500 words)Research Paper
Drag Performance during the 1980's in NYC
Gay and drag queen usually judged according to how they look but the people never gave themselves the opportunity to grasp the importance of accepting them and give them the rights of acceptance in the society where they live upon. Drag queens have long been existed and later on contributed a lot especially in the culture and art, they shows the flexibility and the craftsmanship which helps certain industry evolves to be artistic, amazing and enjoyable.
10 Pages(2500 words)Research Paper
Systemic Lupus Erythematosus

The author explains that SLE is a chronic, inflammatory, prototypic, systemic autoimmune disease affecting connective tissues such as skin, joints along with kidney and serosal membranes. Researchers available indicate an environmental cause, which leads to the development of the disease in individuals genetically predisposed.

7 Pages(1750 words)Essay
Legal and Ethical Considerations
This is to ensure that, in the event of complications, the clients can reclaim their losses (Della-Piana, Low and Lyman, 2005). The client make also put into consideration that the contractor has covered their workers for employees’ compensation. The contractor and the client need to have a contract document whereby they both sign and agree on before any service is provided.
3 Pages(750 words)Research Paper
Did Religion Shape Politics in the 1980's
Religion defined the rank of political leaders in the early 1980’s. This is why in the last quarter of the 20th century religious right emerged to protect freedom of worship. When people became aware of the fact that they had religious rights, many things were compromised, as for instance, some politicians used religion for cover up politically, because when one was down to what the politician believed in, it was clear there was no religion attached to the politician’s belief.
7 Pages(1750 words)Research Paper
Insider Trading
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).
2 Pages(500 words)Essay
American Fashion in 1980's through today
This essay analyzes the fashion trends from the 1980s till today in America. The work fashions designers usually get a nod when associated with a particular celebrity. This is not to say that celebrity promotes all fashion trends. The beginning of 1980s marked a beginning of new fashion trend for both women and men.
2 Pages(500 words)Research Paper
[Love] American Disease & Medicine in 1980's through today (2012)
In addition, some pathogens have been developing resistance to drugs that were previously effective. On a positive note, the period from 1980 to today has seen the invention of vaccines and the understanding of the biochemical nature of threatening microorganisms. A
2 Pages(500 words)Research Paper
Insider Trading
However, the last three decades have witnessed enactment of several complex federal laws effectively prohibiting insider trading with regulations being at the epicenter
2 Pages(500 words)Essay
Insider Trading
Economically analyzing the situation in which an individual violates the insider trading laws can help in judging whether a penalty serves its purpose of discouraging violation of insider trading laws. An individual would commit such an act after weighing the
1 Pages(250 words)Research Paper
Let us find you another Research Paper on topic What were the legal and ethical ramifications of the mid 1980's insider trading scandal for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us