...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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...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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...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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...Insiders Trading: Is it unethical? Table of Content Introduction 3 Body 3-4 Appendix A 5 Conclusion 5 Work Cited 6 Introduction Insider trading occurs when a trade has been influenced by the privileged possession of corporate information that has not yet been made public. Because the information is not available to other investors, a person using such knowledge is trying to gain an unfair advantage over the rest of the market. You're acting on information not known to other investors. Using nonpublic information for making a trade disturbs transparency, which is the basis of a capital market. Information in a transparent market is disseminated in a manner by which all market participants receive it at more or less the same time. Under these conditions, one investor can gain an advantage over another only through acquiring skill in analyzing and interpreting available information. This skill is based on individual merit and awareness. If one person trades with nonpublic information, he or she gains an advantage that is impossible for the rest of the public. This is not only unfair but disruptive to a properly functioning market if insiders trading were allowed, then investors would lose confidence in their disadvantaged position and would no longer invest. Body The practice of insider trading is considered to be unethical by many people around the world. The United States Securities and Exchange Commission (SEC) describe...
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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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...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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...| Insider Trading? | | BA265 Business Law II | | Insider Trading? | | BA265 Business Law II | grantham university June 11, 2012 Authored by: Felix E Rivera grantham university June 11, 2012 Authored by: Felix E Rivera Manny works for Medivac. Medivac is a manufacturer of spinal surgical equipment. Medivac is in preliminary talks with Medtronic to merge with Medtronic. Medtronic is the leader in spinal surgical equipment. Manny calls his brother Mitchell on Monday. Manny tells Mitchell to purchase shares in Medivac as the proposed merger will be announced on Wednesday. Manny purchases $5 million dollars in Medivac shares. The merger is announced and Medivac stock soars from $5 dollars to $50 dollars. Did Manny violate federal securities laws? If so, what law and why? I researched the Federal Securities Laws through the U.S. Securities and Exchange Commission (SEC) website and the term “insider trading” itself is not defined in the federal securities laws. What I did gather is that it is a term generally used to refer to the use of non-public information to trade in securities (in some cases the person who leaks the information isn't really an “insider”), or the communication of non-public information to others. So what is an insider to me? Although I could not find a specific definition, I understood that the law prohibits: * Trading by an insider, while in possession of material non-public information * Trading by a non-insider...
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...public confidence in the integrity of the securities markets.1 The government also created the Securities and Exchange Commission (SEC) to protect the financial markets by enforcing the Securities Exchange Act.2 One of the most important issues covered by the Securities Exchange Act concerns illegal insider trading in which individuals sell or purchase investments based on privileged inside information. Illegal insider trading activities significantly harm the integrity and stability of the securities markets. Thus, it is critical for people to understand and adhere to the requirements set forth by the Securities Exchange Act to prevent illegal insider trading, and it is equally important for those individuals who break the law and engage in these prohibited activities to be prosecuted and punished accordingly. There are two forms of insider trading, one that is considered legal and the other that is clearly illegal. The legal form of insider trading involves corporate officers and directors who buy and sell stock within their own companies on the basis on publically available information. So, once the company releases confidential information to the public, then the insiders are allowed to legally make their trades based on that...
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...What can we learn from insider trade? Evidence from Thailand Nareemet Kittikhuntanasan Student ID: 5882942826 Project Advisor Kanis Saengchote, Ph.D. Committee Tanakorn Likitapiwat, Ph.D. Special Project Submitted in Partial Fulfillment of The Requirements for The Degree of Master Of Science in Finance Faculty of Commerce and Accountancy Chulalongkorn University Academic Year 2015 1. Introduction In general, the insiders are classified as the persons who have more information than the other investors and make an abnormal profit from this unpublished information. Under the Securities and Exchange Act B.E. 2535 of Thailand defines the insiders as directors, executives, auditors, their spouse and minor child, and the owner of more than 10% of stocks. Since they have valuable information than the outsiders, they might use this knowledge for their wealth. Hence, the other investors might use the insider trading data as a signal infers future view of the firms and adjust their portfolios and strategies to make some profits. Even though, there are many evidences supporting that insider trading is informative such as Aboody and Lev (2000) suggest that insiders make profit from their ability to acknowledge changed plan in the researcher and development budgets. Likewise, the paper from Jaffe (1974), Finnerty (1976) and Seyhun, (1986) support that insiders can make profit from their trading. However, many early literatures argue that there are market movement limitation...
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...Insider Trading at the Galleon Group The Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. From greed to more greedy, and finally to destruction, this time the protagonist is Rajaratnam, he was accused of 14 securities fraud. Rajaratnam had a glorious history. He is 52 years old Sri Lanka-American, graduated from the Wharton School, he began his career in the field focusing on technology investment bank Needham & Co., An analyst from the start, 34-year-old became the president of this bank. In 1997, he started a technology stocks investment company, which was called Galleon Group in New York. In 2009, Rajaratnam's net worth to $ 1.3 billion by Forbes global rich list among the first 559. When Galleon was established in NY, Rajaratnam said: "This is Raj Rajaratnam, only the paranoid survived." Unfortunately, this time his "paranoid" gets too far. Rajaratnam's case is the largest in the history of Wall Street hedge fund insider trading case at that time, but also the first use of the Federal Investigation Agency monitor means to obtain evidence relating to insider trading. Rajaratnam's arrest on behalf of the US government efforts to combat financial crime has entered a new phase. In this case, there are two ethic issues that can be discussed. The first is a white-collar crime; insider trading is one of them. The second is the wiretap recording, whether it is legitimate, if it is, what...
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...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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...INSIDER transactions are one of the most controversial and sensitive disclosures for companies to communicate to investors. How your company handles these disclosures can make a strong statement to investors about your company’s transparency. The history of insider transaction disclosure on the Web illustrates companies’ sensitivity and reluctance to provide this information to investors. For years, regulators such as the U.S. Securities and Exchange Commission (SEC) tried to improve transparency around insider trading only to be blocked by heavy corporate lobbying. Eventually, it took massive corporate scandals and collapses in 2001 for the tide to turn against the business lobby. Finally, the SEC introduced rules forcing all U.S. companies to provide access to their insider transaction filings on their corporate websites starting in June 2003. The SEC also dramatically shortened the deadline for insiders to make their filings and made significant improvements to the EDGAR database to accommodate electronic insider reporting. Under the old rules executives had up to 41 days to file reports with the SEC. With the new rules, however, insiders have to file reports by the end of the second business day following the day on which the transaction is executed. Significant geographic differences in insider disclosure Regulators in several countries have followed the SEC’s lead, but with varying levels of effectiveness because most lack a central electronic repository like EDGAR. Consequently...
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...Insider Trading - An Analysis in Corporate Regime 1. Introduction Man amongst all species has proved himself to be the greediest creature since times immemorial. His greed has made him stop as low as possible in utter disregard for all principles of fair play, honesty, morality, etc. In the past and particularly in the last two decades we have witnessed many instances not only at National level but even across the globe where some genius brains have been able to use the vulnerable platform of stock market to their own advantage by enriching themselves enormously at the cost of unprecedented financial losses to thousands of others. A common tool used by these manipulative brains is what in common parlance is known as Insider trading. With the vast developments in trade and commerce all over, every person has become very materialistic. That is the reason why people in general and particularly those in business have developed profit motives. And it is quite often that to fulfill their own monetary expectations, such people employ illegal or immoral means. One such illegal method used by some vested interests in area of corporate business is insider trading.[1] Thus, when an insider of a company uses its price sensitive confidential information to buy or sell its securities thereby making a personal profit, he commits acts to the detriment of the interests of bona fide investors of the company. However, in reality, insider trading can be both legal and illegal. Legal in...
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...Insider Trading More Americans are involved in the stock market than ever before, investing for their retirement and hoping to achieve financial security. But, the stock market has been anything but secure over the years. In fact, after the Stock Market Crash of 1929, so many Americans lost money and confidence in the stock market that Congress passed specific securities laws to help protect investors and to prevent the abuses believed to have contributed to the collapse. The Securities Act of 1933 and Securities Exchange Act of 1934 were enacted by congress with the intent of protecting investors engaged in securities transactions and assuring public confidence in the integrity of the securities markets.1 The government also created the Securities and Exchange Commission (SEC) to protect the financial markets by enforcing the Securities Exchange Act.2 One of the most important issues covered by the Securities Exchange Act concerns illegal insider trading in which individuals sell or purchase investments based on privileged inside information. Illegal insider trading activities significantly harm the integrity and stability of the securities markets. Thus, it is critical for people to understand and adhere to the requirements set forth by the Securities Exchange Act to prevent illegal insider trading, and it is equally important for those individuals who break the law and engage in these prohibited activities to be prosecuted and punished accordingly. There are two forms...
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...Insider trading is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access to non-public information about the company. Such a trade is motivated by the possibility of generating extraordinary gain with the help of nonpublic information (information not yet made public). It gives the trader an unfair advantage over other traders in the same security. insiders are defined as a company's officers, directors and any beneficial owners of more than ten percent of a class of the company's equity securities ------------------------------------------------------------2--------------------------------------------------------------------------- It is important to distinguish between a STAKEHOLDER and a SHAREHOLDER. They sound the same – but the difference is crucial! Shareholders hold shares in the company – that is they own part of it. Stakeholders have an interest in the company but do not own it (unless they are shareholders). Often the aims and objectives of the stakeholders are not the same as shareholders and they come into conflict. The conflict often arises because while shareholders want short-term profits, the other stakeholders’ desires tend to cost money and reduce profits. The owners often have to balance their own wishes against those of the other stakeholders or risk losing their ability to generate future profits (e.g. the workers may go on strike or the customers refuse to buy the company’s products)...
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