insider trading

I. INTRODUCTION Insider trading describes any transactions in securities such as stocks and shares by persons having access to privileged information not available to the general investing public, and who stand a financial gain from this knowledge. Strictly speaking, the term ‘insider’ refers to someone who owes a fiduciary duty to a corporation and its current and potential shareholders. This term, however, has occasionally been expanded to include a wide range of persons with informational …

…TRADING 2 2.2 PROPERTY RIGHTS IN ‘MATERIAL’ INFORMATION 3 2.3 INSIDER TRADING AS A COMPENSATION DEVICE 4 2.4 ARGUMENTS FOR INSIDER TRADING 5 2.4.1 INFORMATION EFFECTS 5 2.4.2 EFFICIENCY EFFECTS 5 2.5 ARGUMENTS AGAINST INSIDER TRADING 6 2.5.1 THE ‘UNFAIRNESS’ ARGUMENT 6 2.5.2 OTHER ARGUMENTS AGAINST INSIDER TRADING 6 2.6 THE REGULATORY FRAMEWORK 7 2.6.1 COMMON LAW RULES 7 2.6.2 SECTION 10(b) AND RULE 10b-5 7 2.6.3 SECTION 16 8 2.7 EFFICIENCY VS UNFAIRNESS 8 III. SELECTIVE DISCLOSURE TO SECURITY ANALYSTS 8 3.1 GENERAL ISSUES ON SELECTIVE DISCLOSURE 8 3.2 ARGUMENTS FOR SELECTIVE DISCLOSURE 9 3.3 ARGUMENTS AGAINST SELECTIVE DISCLOSURE 9 3.4 EFFICIENCY VS UNFAIRNESS 10 IV. CONCLUSIONS 10 REFERENCES & BIBLIOGRAPHY ------------------------------------------------------------------------ **Bibliography**