Insider Trading

ILLEGALTHE DARK SIDE OF INSIDER TRADING

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BEFORE WE GET STARTED: HERES A BRIEF OVERVIEW OF THE TOPICS WELL DISUCSS:

. The Differences between Legal and Illegal Insider Trading. Illegal Insider Trades impact on the 2008 Financial Crisis. The Illegal Insider Trade Law and should it be amended

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Insider Trading What Does it mean???

The trading of a corporations 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.

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Legal VS. Illegal 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 non-public.

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THE 2008 FINANCIAL CRISISIs Illegal Insider Trade to BLAME???

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Some food for thought 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.

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THE CULPRITS OF ILLEGAL TRADE Corporate Executives

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GUILTY AS CHARGED

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IS THERE A SOLUTION???

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.

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TAKE ACTION!!!

Contact your local congressman or woman and push for amendments to the law; free of corporate bureaucracy and loopholesAmending 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.

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LETS RECAP 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

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References1.) 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 1-56662-737-0.

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

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QUESTIONS???

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