...Executive Summary The legislation of insider dealing in Hong Kong is aimed at prohibiting the misuse of particular information about a listed company’s affairs by persons connected with that company, who are in possession of that information, using it or encouraging others to use it for the purpose of trading in the company’s stock to make a profit or avoid a loss. The law of insider dealing is comprehensive in proving contravention of ordinance by covering five essential elements, including mental intention, connected persons, relevant information, dealings of securities or derivatives and securities. However, execution is difficult in Hong Kong. This report aims to investigate the causes for the low effectiveness of the law. It begins by defining the law of insider dealing, followed by analyzing the credits and defects of the existing law. It then focuses on addressing the issue of difficulties in enforcing of the law of insider dealing in practice. Credits of Existing Law The existing law is appropriated in terms of independent tribunals, strict penalties, and dual civil and criminal regime for fighting against insider dealing. Details will be discussed in later text. Defects of Existing Law Four perspectives of defects of the existing law have been indentified and analyzed in details. Insufficient enforcement of law may be caused by the narrow definition of “Connected Persons”, lack of clear guidelines for civil and criminal proceedings, difficulty in proving...
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...The report on film “Insider” The most interesting thing is that the film was put on the events, which only recently had taken place in America. The real names of main characters of the story, played by Al Pacino and Russell Crowe, are Dr. Lowell Bergman and Uigand. Dr. Uigand actually testified in court against the tobacco company "Brown & Williamson" (by the way, the management of the company after the movie has filed a lawsuit against the producers of the film) and convinced the court of justice, so then in fifty U.S. states have filed lawsuits on tobacco companies for a total of 246 billion dollars. Many of these claims have been satisfied and called a real panic among the tobacco workers, because it was a first precedent when the tobacco workers were found guilty. Prior to this, tobacco companies do not ever lose in the court, spending on lawyers and attorneys huge money. I have already heard about these processes, and still could not figure out what it was about. But this film put everything in its place. This is not about that tobacco itself is addictive and harmful for health. The question is what chemical elements and compounds the tobacco companies add in production of cigarettes to have "better taste", "better smoke" and so on. Ammonia and nitrate - not all of that stuff, which adds a certain cigarette "taste", and many times increases the addiction to tobacco, the risk of lung cancer and other illnesses. That's the whole point. Smokers consciously endanger...
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...nicotine is addictive and harmful. When Brown and Williamson executive Jeffrey Wigand (Crowe) tries to expose the industry's cover-up, he is threatened into silence. He eventually gets his story to 60 Minutes producer Lowell Bergman (AL Pacino), but CBS decides against airing it due to political and economic pressures, and the threat of lawsuit from Brown and Williamson. Before we start, I think it's important that you know a little thing about me, and where I'm coming from. I do smoke. But I believe that most of the lawsuits filed against the tobacco industry are unfounded, desperate attempts for people to put the blame on anyone but themselves. I think social security is a safety net for the financially irresponsible. I thought The Insider was a great movie from a strictly entertainment perspective (don't get ahead of me on this one!), and I enjoyed it very much. Russell Crowe is Jeffrey Wigand, a Brown and Williamson VP of Research and Development whose conscience compels him to blow the whistle on the industry. He claims that Big Tobacco has been covering up scientific research that proves nicotine is addictive and harmful. The writing puts a lot of energy into making sure that Wigand is a sufficiently complicated character, and one that we sympathize with. To be sure, he's not entirely one-dimensional. Initially, he does what most of us would do in his position: he takes the money and benefits that the company offers him in return for silence. After all, the guy has...
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...The Insider is a film filled with ethical dilemmas, suspense, and controversy. It is based on a true story related to an episode of the CBS news show 60 Minutes that never aired. The plot puts Dr. Jeffrey Wigand (Russell Crowe) at odds with Brown & Williamson, the third largest tobacco company in the country. Wigand was fired from his position as Vice President of Research and Development, at which he was instructed to hide information related to the addictive nature of nicotine. The plot takes off when Lowell Bergman (Al Pacino), a producer for 60 Minutes, discovers that Wigand has a story to tell. The best way for Wigand to tell that story is with the help of Bergman, via an interview aired on 60 Minutes. However, tobacco companies have a history of viciously defending their profits, by whatever means necessary, and Brown & Williamson does just that. The story hits a climax as the interests and incentives of the television station CBS, 60 Minutes, Dr. Wigand and Brown & Williamson are played out. Portrayal of Business The film portrays business in an extremely negative light. It focuses on two central conflicts – one between Brown & Williamson and Wigand, the other between CBS Corporation and Bergman. Brown & Williamson is the primary antagonist. The film is ripe with examples of the bad things they do. Their principle, most damaging offense is deceit. They are charged with covering up the addictive properties of nicotine and finding ways to exploit...
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...1) Which are the stakeholders of CBS News? * Stakeholder of CBS news are Ms Helen Caperelli, Mr Eric Cluster, Don Hewitt, Lowell Bergman, Mike Wallace, Jeffrey Wigand, CBS corporate, and all the employees directly or indirectly related to it. 2) Had CBS News established trust in its relations with all its stakeholders? Please justify your answer. * No, CBS has not been able to establish relations to all its stakeholders. It was seen in the later part of the movie that when CBS management kill the story of doctor vegan by fearing that a law suit by big tobacco would put at risk its proposed merger with Westing house and the multimillion dollar bonuses that were to be paid to CBS executive. Hence, they broke up their trust with all its stakeholders by backing up just for the profit of the company. 3) Was trust necessary between CBS News and its employee/ sources? Why do you say so? Would your answer differ if the industry was different? Why? * Yes, necessarily there has to be trust between CBS and its employees. While honesty and integrity are the basis for stakeholder trust across the board, those stakeholders that interact extensively with the organisation need to perceive authentic concern for their well-being to continue their trust. In other words, even well-meaning, ethically driven organisations can destroy trust if they are seen as being “fair but callous” when it comes to managing relationships with their most important stakeholders...
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...that he would get paid. Moreover, this isn’t a contract that the statute of frauds requires to be evidenced in writing. Therefore, the oral contract can be enforced. Additionally, this case is about the performance of work and there was an explicit promise that Freitag would be paid for his work. Moreover, in every contract, there is an implied obligation that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. In addition, there was an implied covenant of good faith and fair dealing. This is an ethical issue because Boeing and the contractor were trying to get out of paying Freitag for his work. They’re unethical because they promised to pay Freitag and now they’re raising the defense that they actually don’t have to pay him because it wasn’t in writing. They’re also not practicing good faith and fair dealing. I would rule in favor of Freitag. 7. The agreement was not binding. The contract was violative of the Statute of Frauds and is not enforceable. There was also not a note or memorandum. In order for the agreement to be binding it should have been signed by the person who was bound by the contract. However, Corning glass works and Hanan only agreed orally. The agreement was unethical. ...
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...nicotine is addictive and harmful. When Brown and Williamson executive Jeffrey Wigand (Crowe) tries to expose the industry's cover-up, he is threatened into silence. He eventually gets his story to 60 Minutes producer Lowell Bergman (AL Pacino), but CBS decides against airing it due to political and economic pressures, and the threat of lawsuit from Brown and Williamson. Before we start, I think it's important that you know a little thing about me, and where I'm coming from. I do smoke. But I believe that most of the lawsuits filed against the tobacco industry are unfounded, desperate attempts for people to put the blame on anyone but themselves. I think social security is a safety net for the financially irresponsible. I thought The Insider was a great movie from a strictly entertainment perspective (don't get ahead of me on this one!), and I enjoyed it very much. Russell Crowe is Jeffrey Wigand, a Brown and Williamson VP of Research and Development whose conscience compels him to blow the whistle on the industry. He claims that Big Tobacco has been covering up scientific research that proves nicotine is addictive and harmful. The writing puts a lot of energy into making sure that Wigand is a sufficiently complicated character, and one that we sympathize with. To be sure, he's not entirely one-dimensional. Initially, he does what most of us would do in his position: he takes the money and benefits that the company offers him in return for silence. After all, the guy has a...
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...The Insider (1999) is a film rife with ethical dilemmas, suspense and controversy. It is based on a true story related to a 1994 episode of the CBS news show 60 Minutes that never aired. The plot puts Dr. Jeffrey Wigand (Russell Crowe) at odds with Brown & Williamson, the third largest tobacco companies in the country. Wigand was fired from his position as Vice President of Research and Development, at which he was instructed to hide information related to the addictive nature of nicotine. The plot takes off when Lowell Bergman (Al Pacino), producer for 60 Minutes, discovers that Wigand has a story to tell. The best way for Wigand to tell that story is with the help of Bergman, via an interview aired on 60 Minutes. However, tobacco companies have a history of viciously defending their profits, by whatever means necessary, and Brown & Williamson does just that. The story hits a climax as the interests and incentives of the television station CBS, 60 Minutes, Dr. Wigand and Brown & Williamson are played out. Portrayal of Business The film portrays business in an extremely negative light. It focuses on two central conflicts – one between Brown & Williamson and Wigand, the other between CBS Corporation and Bergman. Brown & Williamson is the primary antagonist. The film is ripe with examples of the bad things they do. Their principle, most damaging offense is deceit. They are charged with covering up the addictive properties of nicotine and finding ways to exploit ...
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...USA V. VISA U.S.A. INC., VISA INTERNATIONAL CORP., AND MASTERCARD INTERNATIONAL INCORPORATED In 1998 USA filed a complaint against Visa and MasterCard re their dual governance and exclusionary rules of combinations and conspiracy in restraint of trade. (DOJ, 1998) Essay Plan My motivation for choosing the abovementioned case comes from my interest in the financial services market, its regulations and their implications on consumers. This case is attention-grabbing, not solely due to the remedy, but also due to the implications it has on domestic and international markets. It also gives the opportunity to analyse the controversy of vertical exclusionary restraints (Whinston, 2006). When analysing the Visa-MasterCard case, there are two main ‘economic-schools-of-thought’ to be considered. Chicago School(CS) dismisses vertical exclusionary contracts as an anti-competitive tool. While, Post-Chicago School(PCS) offers an opposing explanation by suggesting different models to rationalise anti-competitive behaviour using vertical restrictions. Both schools build their models under the assumption of first-mover advantage and the monopoly power of an incumbent firm. (Motta, 2004) Using the CS in this case, we could assume that Visa and MasterCard are the combined incumbent on the market, due to their cooperative actions. The banks are the buyers and AmericanExpress is the potential new entrant. It could be assumed that AmericanExpress is a new entrant for the market of issuing...
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...Abstract Insider trading is a serious crime. The general public is held accountable, and yet, it is legal for members of Congress. There are several cases involving members of society being prosecuted for their illegal activity of insider trading; while Congress has exempted their members from acting on the same type of information. This type of conduct has serious legal, ethical and moral considerations. This paper will address the definition of insider trading. The legal, ethical and moral considerations of insider trading will be outlined, through a snap shot of the legal precedence recently in the press involving congressional behavior. It will further look at cases that have made headlines in past years, to show the distinction of what can happen to the general public who participate in insider trading. During a recent article by Parloff (2011), he stated, “The problem arises with respect to market-moving information a congressman learns in the course of doing his legislative work.” This comment is at the heart of the issue involving insider trading and Congress. The people elect members to Congress to act in their best interest. When the people of society feel members of Congress have violated that trust under legal, ethical, or moral wrongdoing, the members of society make decisions based upon those standards set by Congress. Thus members of society participate in insider trading knowing it is legally wrong. Insider Trading Insider trading can be a severe crime...
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...CAN ONTARIO IMPROVE ITS INSIDER TRADING REGULATION AND ENFORCEMENT BY ADOPTING POLICIES USED IN THE USA? Prepared by Muhammad Bilal Amjad 2B Accounting and Financial Management ID 20429857 AFM 231: Business Law School of Accounting and Finance University of Waterloo Friday, August 9, 2013 Abstract The purpose of this paper is to present potential suggestions on how Canada (more specifically, Ontario) can improve its insider trading regulation and enforcement. In order to do so, this paper will compare the insider trading regulation and enforcement in Canada and the USA. It will examine whether or not Ontario should take from the methods used in the USA in order to strengthen its regulation and enforcement of insider trading. Ontario was chosen in particular because securities regulation in Canada falls under the jurisdiction of provincial governments, with Ontario being home to Canada’s largest securities market. Introduction Insider trading is a subject of great significance in security markets all across the globe. Not only does it violate securities law in Canada and many other countries, it is also seen as highly unethical. It applies not only to equity, but also to bond and option markets. Insider trading is deemed illegal primarily because it is contrary to the public trusts upon which security markets operates; it undermines investor confidence, and as a result, discourages investment (Dessaulles, 2013, p. 9). In addition, it is viewed as being immoral because...
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...I started my professional career at one of the “big four” accounting firms working within the audit department. As it is customary, audits are performed within a ‘Chinese wall’ environment and auditors are bound by law not to disclose any information to third parties nor to other colleagues within the firm. Reason being, auditors have unrestricted access to sensitive financial information that can be used to front run markets. One particular late Friday night, a couple of us were sitting at a bar close to the client’s Head Office and after a couple of drinks, Donald, a colleague and good old friend of mine working on the same audit asked me point blank whether I would entertain making use of the privileged information we held and buy shares before the company released its results, which were due in less than 3 weeks. The company had done remarkably well that year and we knew that such results would have had a significant impact on the share price. I was shocked at this jaw dropping indecent proposal. I assumed that it was the beer talking and not him. On the way home, I could not help thinking about the money I could make on the back of this information. I must admit, that throughout the audit, this idea had already loosely crossed my mind, but at no point I took it seriously and never thought of actually taking action on my privileged position. Besides the moral aspects of the situation, I also knew the legal repercussions including the withdrawal of my professional...
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...Why Is Insider Trading Considered Wrong? Insider trading is defined as “the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company. The stock market is supposed to be “fair,” and having insider information gives an illegal edge to possible investors. Insiders include those such as officers or directors of a certain company. They can also include investors that own more than a 10% share in a company because those individuals usually get to sit on the board. These individuals have a fiduciary duty to the owners of the company’s stock, meaning that they put their interests before their own. Furthermore, in the United States, insider trading does not have to be committed by an aforementioned “insider.” It can be committed by any shareholder who buys based off of nonpublic knowledge. When one person buys a stock because of nonpublic information, there is also a seller of that same stock that may have not made that sell decision if they knew the same nonpublic information, and vice versa. In addition, future buyers of that particular stock are going to pay inflated prices compared to the investor with insider information because he had access to that information first. Transparency is a big part of keeping the markets balanced, which means that all investors have the same information available to them. For example, it would not be fair if one student had the test bank for a test...
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...Running Head: AN INTRODUCTION TO FINANCIAL MARKETS | | | | | | |Susana Silvestri | | |Grand Canyon University | | |FIN-350 | | |June 12, 2011 | | | | |a. A household’s current savings includes its current purchases of corporate stock as well as prior holdings of | |corporate stock and its current investment includes the equity it currently has in its house. ...
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...at the same time. 2. Causes and Antecedents 2.1 Breach of fiduciary duties Du’s failure to perform his fiduciary duty can be attributed to an easy access to nonpublic securities in the company. He was made privy to the details of the pitching exercise of Kazakhstan acquisition and handled a lot of confidential e-mails related to the project. Taking the advantage of this privilege, he got permitted to trade in CRH’s shares with approval from his designated manager without critical scrutiny. During the transaction, Du did not act with integrity in the best interest of his trustees. Instead he breached his duties and committed fraud by having 10 purchases of CRH shares before the announcement of its proposal and that alleged an act of insider dealing contrary to the Securities and Futures Ordinance (SFC). He even counseled and procured his wife to deal in the listed securities of CRH. 2.2 Inadequacy of internal control system A well-developed and comprehensive internal control system should be implemented to detect abnormalities in trading activities. In 2007, Du successfully made surroundings within Morgan Stanley’s internal control system and got permitted to trade in CRH’s 1 shares. He purchased in total 10 million fictitious CRH shares on four separate occasions only in a month and the system failed to adequately detect trader’s illegal...
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