Foundations of Business Research Paper Example | Topics and Well Written Essays - 1000 words - 1

Foundations of Business - Research Paper ExampleViolation of insider trading also comprise of tipping such breeding and misappropriation of information. There atomic number 18 various cases of insider trading. The employees, officers and directors of corporate flockd the securities of company after(prenominal) learning the confidential report of the company. Friends, family members and line of merchandise associates of the corporate officials whitethorn trade the securities after receiving hidden information. The securities corporation also be traded by employee of banking, law and brokerage who are provided such information. The government employee can trade the securities by learning such information from their employment (U.S. Securities and Exchange Commission, 2001). 2.0 Types of Transactions Considered Insider Trading Regardless of Their rectitude The information of the company is non tell to the public until the appropriate time. If the employees or officers in the c ompany disclosed the tangible to the public before company does, then it will affect the stock price of the company. The material may be positive or negative but is illegal to disclose to the public and it may result to the violation of the policy of company. The transaction essential not take place until the next business day after the exposure of material information. The transactions which are prohibited in the company are transaction in company securities and transaction in the securities of another(prenominal) companies. In company securities transaction, an employee is aware of the materials and non-public information about the company. He is required not to be part of certain activities of the company. Company securities trading must not be done, i.e. purchasing or selling company securities. He must not declare oneself the public to buy, hold or sell the securities of the company. The employee should not disclose the information of the company and must not guide or help anyone in any of these activities. Transaction is valid in case of taking into custody for raising money which is not an exemption to the prohibition made on insider trading. In other companies transaction in securities, an employee is aware of the non public information of other companies beca drug abuse of their jobs. He is not supposed to trade securities of other companies, which is the violation of other companies policies (Heckmann Corporation, n.d.). 3.0 Specific Conditions under Which Insider Trading Is Considered Illegal under United States national Securities Laws The laws of Federal securities prohibit insiders from benefiting from the information which have not been provided to the public. The laws do not provide permission that the member in public market should have equal information rather it focuses upon the fact that certain persons might use their position to attain undue informational advantage over others. Under US Federal securities laws, it is unlawful for e very person whether directly or indirectly, by using any methods or instrumentality of interstate highway commerce, by means of mails or any facilities of national securities exchange in order to action various activities. A person should not employ any scheme, mechanism or artifice to defraud. He should not make any false statement of a