Insider Trading

Topics: Stock market, Stock, U.S. Securities and Exchange Commission Pages: 3 (1168 words) Published: March 2, 2005
Insider Trading

In our economic economy today, we have gotten a few high profile cases were people have tried to make money by using illegal tactics, and these are illegal tactics are based on the insider information. These high profile cases were on Martha Stewart and President George W. Bush. This is why I chose to write my paper on what exactly "Insider Trading" is. Insider trading has to do with stocks, on the stock market. The stock market is basically an organized place where stocks and bonds are traded. The members of this exchange usually buy and sell the stocks for others while charging a commission for doing this work for their clients. Although more and more people are now trading online stockbrokers are not as in demand for their services as they once were which is why Charles Schwab investment firm has laid off more then 1800 workers in this past month, which amounts to a 10 percent reduction in the work force. There are certain limitations on stocks before they can be traded and listed on the stock market. The New York Stock Exchange (NYSE) the largest in the United States was founded in 1970 and handles over 70% of all trades. Then there is the National Association of Securities Dealers Automated Quotations (NASDAQ) which is the fifth largest stock trade in the world. On the stock market there are a lot of illegal things that go on that are unethical. The most known crime that goes on is insider trading scandals. The way insider trading occurs is when one person or many people have information on a company that the rest of the public doesn't know of and use it to make a profit on the stock market. This trading in the United States has been illegal since 1934 and is protected by the Securities and Exchange Commission (SEC). This requires all companies to disclose statements to the public before offering any securities on the public market. The SEC views insider trading unfair to the investors. The SEC also regulates stock exchanges, brokers,...

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