What is insider trading? What circumstances must be met for an individual to be convicted of securities fraud for insider trading? Use examples to support your answer by describing once case where the defendant was convicted, and once case where the defendant was not. Be sure to emphasize what differentiates the two cases.© BrainMass Inc. brainmass.com October 25, 2018, 6:52 am ad1c9bdddf
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Insider Trading and Securities Fraud
Insider trading is the practice of using information for taking decisions. In this case, the information in question has not been disclosed to the public. Insider trading is considered as illegal behaviour by the traders who buy and sell company stock. Most types of insider trading that provide benefits to the traders are ...
Insider trading and securities fraud is examined. The circumstances which must be met for an individual to be convicted of securities fraud for insider trading is examined.
Identify the type of crime committed in each of the following examples. Indicate if the crime is a misdemeanor, or a felony. You will do much of the research for any felonies. Explain which cases you will research, as a result. Will you have a heavy or light research load these next months?
Three securities brokers agree in a conversation to aggressively sell a certain stock and then sell their own shares at a profit after the share price increases to a certain dollar value. However, one of the brokers later decides not to go along with the plan. Is this broker guilty of a crime?
*** From my research I would feel that the two gentlemen could be charged with insider trading which I think is a felony - "is sale of legitimate stock by a broker who conceals information about his or her own involvement with the brokerage company. These acts are prohibited by rules established by the Securities and Exchange Commission.
Insider trading prosecutions have been some of the most publicized white collar prosecutions of the 1980s and 1990s. Surprisingly, "insider trading" is not defined in any specific statute; it is a term used to describe insiders (such as officers of a corporation) taking unfair advantage of information to make money or avoid losing money in securities. Generally, insider trading means that an insider with material, non-public information engages in trading without disclosing that information to the public first. These crimes typically are prosecuted under the Securities and Exchange Act of 1934. However, prosecutors are not confined to using specific securities fraud statutes to prosecute securities fraud. General anti-fraud statutes may be used instead of, or in addition to, specific securities fraud laws. For example, parties engaged in securities fraud may be charged with violating mail and wire fraud statutes."http://www.ittc.ku.edu/~sgauch/767/files/380.html#250
However, the third party did not actually commit the act thus I think he could be charged with conspiracy and I think this is also a felony- "The law of conspiracy and the law of aiding and abetting are other general doctrines that apply to a wide range of offenses. A conspiracy is an agreement between two or more persons to commit a crime. For example, if three people conspire to commit murder, at least one of them takes action to further the conspiracy, and the murder actually occurs, they all can be charged with both conspiracy and murder. Even if a conspirator backs out of the conspiracy, but the other conspirators commit the crime, all conspirators may be criminally liable if the acts were reasonably foreseeable." http://www.ittc.ku.edu/~sgauch/767/files/380.html#250
However, this was an oral and not a written agreement so I am unsure as he may be able to dispute his involvement within a court of law.
An executive submits fictitious invoices from a shell company, which are paid.
Now this I am confused - I at first thought it was embezzlement which is a felony - then it can be considered fraud which I think is also a felony - but also can be considered money laundering and this is also a felony I think. Thus, I it would be a felony no matter which but I am just confused which one. For instance, I found a case which was similiar - http://cleveland.fbi.gov/dojpressrel/2006/moneylaundering033006.htm
An employee sells a customer list to a competitor.
Now this I just have no idea - I found a case where something similiar occurred but was not able to determine the charge - http://money.cnn.com/2004/06/23/technology/aol_spam/View Full Posting Details