2. HERE’S A BRIEF OVERVIEW OF THE TOPICS WE’LL DISUCSS:
. The Differences between “Legal” and “Illegal” Insider Trading
. Illegal Insider Trade’s impact on the 2008 Financial Crisis
. The Illegal Insider Trade Law and should it be amended
3. What Does it mean???
The trading of a corporation’s stock or other securities (e.g. bonds or
stock options) by insiders (e.g. employees, directors) with potential
access to non-public information about the company.
4. “ Legal Insider Trading “
The practice of legal trades by
“insiders” of corporations
where the information is
public.
“Illegal Insider Trading”
The practice of illegal trades
by “insiders” of corporations
where the information is nonpublic.
6.
In 2008, the number of illegal insider trading cases increased by
25% compared to the 2007 fiscal year.
In 2008, the SEC brought 671 enforcement actions against illegal
trade insiders. The 2nd highest in history.
9. The Securities Exchange Act of 1934 has purposely VAGUE provisions
that makes the purchase or sale of any security through “manipulative and
deceptive devices” illegal.
According to a NY Times Columnist, “It, referring to the law, may come as a
surprise to know that there is NO actual language that defines the term in
legal books”.
10. Contact your local congressman or
woman and push for amendments to the
law; free of corporate bureaucracy and
“loopholes”
Amending this law will put immediate
pressure on white-collar offenders.
Punishment, such as loss of corporate
bonuses, stock and an increase in prison
time for first time offenders should be
addressed within the amendments.
11. In this Presentation, we discussed:
The differences between “Legal” and “Illegal” Insider Trading
Illegal insider trades’ impact on the financial crisis of 2008
The Illegal Insider Trade law and should it be amended
12. 1.) PLC Corporate and Securities. (2009). Financial Crisis Series: Impact on
Capital Markets. www.practicallaw.com, p.2.
2.) PLC Corporate and Securities. (2009). Financial Crisis Series: Impact on
Capital Markets. www.practicallaw.com, p.3.
3.) Clary, T. (2011). Insider Trading. The New York Times, p.1.
4.) Clary, T. (2011). Insider Trading. The New York Times, p.2.
5.) Bainbridge, S. (1999). Securities Law: Insider Trading (1999) ISBN 1-56662737-0.
6) Harris, L. (2003). Trading & Exchanges, Oxford Press, Oxford, Chapter 29
"Insider Trading" ISBN 0-19-514470-8.
7) Grechenig, T. (2006). The Marginal Incentive of Insider Trading: an Economics
Reinterpretation of the Case Law, 37 The University of Memphis Law Review. P.
75-148
