insider trading

Examples of insider trading in the following topics:

• The Regulators

  • In addition, the commission requires companies to tell the public when their own officers buy or sell shares of their stock; the commission believes that these "insiders" possess intimate information about their companies and that their trades can indicate to other investors their degree of confidence in their companies' future.
  • The agency also seeks to prevent insiders from trading in stock based on information that has not yet become public.
  • In the late 1980s, the SEC began to focus not just on officers and directors but on insider trades by lower-level employees or even outsiders like lawyers who may have access to important information about a company before it becomes public.
  • The Commodity Futures Trading Commission oversees the futures markets.
  • It is particularly zealous in cracking down on many over-the-counter futures transactions, usually confining approved trading to the exchanges.

• White-Collar Crime

  • One well-known insider trading case in the United States is the ImClone stock trading case.
  • White-collar crime, is similar to corporate crime, because white-collar employees are more likely to commit fraud, bribery, ponzi schemes, insider trading, embezzlement, cyber crime, copyright infringement, money laundering, identity theft, and forgery .
  • Insider trading, the trading of stock by someone with access to publicly unavailable information, is a type of fraud.
  • One well-known insider trading case in the United States is the ImClone stock trading case.

• Drawbacks of Repurchasing Shares

  • Share repurchases often give an advantage to insiders and can be used to manipulate financial metrics.
  • This gives insiders an advantage because they are more likely to know whether they should sell their shares to the company .
  • Martha Stewart was convicted of insider trading, which is not the same as insiders choosing whether to sell their shares in a share repurchase.

• The Efficient Market Hypothesis

  • The weak-form EMH claims that prices on traded assets (e.g., stocks, bonds, or property) already reflect all past publicly available information.
  • The strong-form EMH additionally claims that prices instantly reflect even hidden or "insider" information.
  • In semi-strong-form efficiency, it is implied that share prices adjust to publicly available new information very rapidly and in an unbiased fashion, such that no excess returns can be earned by trading on that information.
  • If there are legal barriers to private information becoming public, as with insider trading laws, strong-form efficiency is impossible, except in the case where the laws are universally ignored.

• Regulating Virulence

  • Trade-off hypothesis argues that pathogens tend to evolve toward ever decreasing virulence because the death of the host (or even serious disability) is ultimately harmful to the pathogen living inside.
  • For example, if the host dies, the pathogen population inside may die out entirely.
  • The bacterium finds itself inside a human instead of in the soil by mere happenstance.
  • Compare and contrast the hypotheses that explain why a pathogen evolves as it does: Trade-Off, Short-Sighted Evolution and Coincidental Evolution Hypotheses

• Sales Promotion

  • There are two types of sales promotions; consumer and trade.
  • A consumer sales promotion targets the customer while a trade sales promotion focuses on organizational customers that can stimulate immediate sales.
  • They are dispensed as neckers placed around the 'neck' of a bottle, on-shelf meaning available where product is displayed, as a free-standing insert (FSI) or booklet that is delivered inside the local newspaper, at checkout, on-line, and displayed and shown on mobile phones for redemption.
  • Wholesalers, retailers and other organizational groups are offered a wide array of sales promotion devices such as trade allowances or short term incentives to encourage retailer to stock up on a product, dealer loaders incentivizing product purchase and display, trade contests for selling the most product, point-of-purchase displays to create impulse buying and spiffs or bonus commissions on certain products and trade or functional discounts paid to distribution channel members for conducting sales and special events.

• Types of Stock Market Transactions

  • Initial public offerings are used by companies to raise expansion capital, monetize the investments of early private investors, and become publicly traded enterprises.
  • After the IPO, when shares are traded freely in the open market, money passes between public investors.
  • The offered shares are privately held by shareholders of the issuing company, which may be directors or other insiders (such as venture capitalists) who may be looking to diversify their holdings.
  • Usually, however, the increase in available shares allows more institutions to take non-trivial positions in the issuing company which may benefit the trading liquidity of the issuing company's shares.
  • The remainder, termed stockholder's equity, are kept inside the company and used for investing in the future of the company.

• Consumers of Accounting Information

  • Cruder forms of accounting were inadequate for the problems created by a business entity involving multiple investors, so double-entry bookkeeping first emerged in northern Italy in the fourteenth century, where trading ventures began to require more capital than a single individual was able to invest.
  • Accounting that concentrates on reporting to people inside the business entity is called "management accounting" and is used to provide information to employees, managers, owner-managers, and auditors.

• Open and Closed Circulatory Systems

  • In a closed circulatory system, blood is contained inside blood vessels, circulating unidirectionally (in one direction) from the heart around the systemic circulatory route, then returning to the heart again.
  • An open circulatory system does not use as much energy to operate and maintain as a closed system; however, there is a trade-off with the amount of blood that can be moved to metabolically-active organs and tissues that require high levels of oxygen.

• NYSE

  • To be able to trade a security on the NYSE, it must be listed.
  • They must also disclose certain information to the exchange, providing a measure of transparency that prevents insider manipulation of the stock prices.