Prevention of Insider Trading Stocks

Prevention of Insider Trading Stocks

Introduction

Ethics has always been a key factor in the functionality of every domain in almost every era. Ethics play a really significant role in order to comply the specific profession with the designated boundaries of conduct. Similarly, the business arena in this regard is no exception, as well, and the imperatives of ethics fall with the same level of severity in this domain as in any other. Numerous scholars are of the view that the sensitivity of the ethics and the fair play renders great security to the business domains, in numerous aspects; for instance, with respect to the trust or faith put in by the consumers in the firm, the monetary risk involved, as well as the overall reputation of the firm.

Discussion

Insider Trading Stocks

The term insider trading stock holds an extremely negative connotation in the American business, as well as legal domains. The literal concept behind the phenomenon of the insider trading entails the instances, when with respect to some vital and major decisions taken by the authorities of the organizations are going to have serious effects on market value of the company's stock.

With the decisions taken, the market value of the company's stock will either increase or decrease. However, this information is confined to a handful of employees of the organization, and still has not been made public. If those employees tend to take advantage of this potential opportunity, by buying the shares of the company's stock in advance, provided the stock price is believed to rise, without disclosing their identity, is believed to be insider trading.

Unethical and Criminal Activities in This Regard

Insider trading stock can never be respected as a harmless or ethical action. Why would any action that has the liability of making not only the company suffer, but also pursuing actions that can only be undertaken by a few, and will benefit them, while other are liable to suffer. Therefore, there lies no doubt that not only is in trading stock unethical, but also possesses criminal purpose.

Unethical Aspect

The activities carried out in this matter are extremely unethical. It is extremely unethical that an employee of the organization is aware of the future position of company's stock, and tends to take advantage of this situation, without taking the management into confidence or knowledge (Elder, 2011).

Employees Unethical Actions Make the Company Suffer

Unfortunately, the selfishness and ...