Essay on Insider Trading

965 Words Mar 8th, 2013 4 Pages
M.Sc. Finance, 1st Semester Professor Braun Business Ethics 16 October 2012

Insider Trading In a securities market there are winners and losers, people who get good prices and people who get bad prices. Other things equal, the person with the best information about what is being bought or sold stands in the best position to find bargains and get the best price. Competing against
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Using information that is not publicly shared in order to satisfy our own interests is therefore wrong and immoral. The equal access view on the other hand emphasize on the fact that everyone should have access to the information rather than on its possession. One may also argue that insider trading is a form of property rights violation in a perspective that the information used may be considered as the company's property and should therefore not be used by any individual for personal gain. It is also often argued in past literature that insider trading causes harm to small investors who do not have access to the valuable information that will be used by bigger organizations widening the gap between small and professional investors. Such inequalities also have a considerably negative impact in the public confidence and will discourage many from market trading. Another relevant point is the negative impact insider trading has on the general market morality. Indeed, Werhahn for instance emphasizes on the necessity of a general morality carried out by certain fairness in competition and a reasonably restrained self-interest to sustain the market.

Case Study: Jane Doe (fabricated example)
Jane Doe, an engineer for Software Company, overhears a conversation during a morning elevator ride to her office on the 38th floor of the New Market Building. She observes the two passengers leave the elevator on the 27th floor. She

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