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HartnettHunter HartnettProfessor BaileyManagement 2505 November 2014Annotated Bibliography of The Ethics of Insider Trading1. Beny, L. (2005). Do Insider Trading Laws Matter? Some Preliminary Comparative Evidence. American Law and Economics Review, 7(1), 144-183. Retrieved November 5, 2014, from Oxford Journals.In her article, Laura Beny discusses insider trading in today’s society, specifically its lack of regulatory action and enforcement. She, in response to this apparent inaction, conducts several social experiments in hopes of an explanation. She found that, not only is insider trading incredibly hard to recognize and prosecute, but that in many instances individuals committing these offenses were unaware that their practices were even considered fraud.This information, along with the statistics and findings of each individual experiment, could provide useful in the final project,2. Krawiec, K. (2001). Fairness, Efficiency, and Insider Trading: Deconstructing The Coin Of The Realm In the Information Age. Northwestern University Law Review, 95(2),443-455. Retrieved November 5, 2014, from Hein Online.Kim Krawiec explores the impact of federal securities laws and questions how laws should restrict stock fraud, if at all. She highlights an extraordinary trait of insider trading, its apparent inability to be sufficiently analyzed, both theoretically and legally. While this characteristic is present in many different forms of intellectual property, it appears to be especially prevalent in the stock market. I chose this article because it provides an alternate look at insider trading regulatorytactics, straying from the current system.3. Cziraki, P., De Goeij, P., & Renneboog, L. (2013). Corporate Governance Rules And Insider Trading Profits. Review of Finance, 18(1), 67-108. Retrieved November 4, 2014, from Oxford Journals.This article experimented with the Dutch stock market, which lacks many of the shareholder rights exercised in other countries such as the United States, and compared the effects of different forms of governance on insider trading profits. It also explored the “imperfect substitute relationship” that exists between insider trading profits and private benefits. This article provided an 1Hartnettinteresting look into the opportunity-cost of tightened regulations and the subsequent impact on the corporate structure. 4. Fernandes, N., & Ferreira, M. (2008). Insider Trading Laws and Stock Price Informativeness. Review of Financial Studies, 22(5), 1845-1887. Retrieved November 5, 2014, from Oxford Journals.This article examines the relationship between the enforcement of insider trading laws and price informativeness in the surrounding region. The authors found that increased enforcement in first world markets led to an increased “price informativeness rate,” a measure of the investment decisionsof a certain country. However, in developing markets, increased enforcement led to decreased public informativeness. This was attributed to the importantinformation passed down by insiders that was lost when enforcement was heightened. While developed nations have other ways of accessing and processing that information, developing nations lack the technology and market capability. This is an interesting discovery that I could use this in my final project to highlight the imperfections that still exist in markets around the world, and to possibly analyze ways of recovering the information lost with insiders in third world countries.5. Beny, L. (2007). Insider Trading Laws and Stock Markets Around The World: An Empirical Contribution To The Theoretical Law And Economics Debate. Journal of Corporation Law, 32(2), 237-283. Retrieved November 5, 2014, from Hein Online.I chose this article because it accents the blurred ethicality of insider trading and the resultant impact it has on stock market performance. As is common with intellectual property, ethical and moral guidelines are hazy at best. This article explores different ways of attacking insider trading without negatively influencing the economic state of the market, and this information would be valuable in developing new ways to both teach about and govern securities.6. Padilla, A. (2007). How Do We Think About Insider Trading? An Economist's Perspective On The Insider Trading Debate And Its Impact. Journal of Law, Economics, and Policy, 4(2), 239-255. Retrieved November 4, 2014, from HeinOnline.I chose this article because it best summarizes the difficulties in establishing central ethical guidelines on insider trading. Alexandre Padilla, working with research previous done by Henry Manne, highlights inconsistencies between securities fraud laws and the impact that the “fraudulent” acts have upon the market. Rather than use this in a way to justify insider trading, I believe that 2Hartnettit’s best used in portraying the “always evolving” nature of market ethics and the misconceptions we have about insider trading.7. Machan, T. (1996). What Is Morally Right With Insider Trading. Public Affairs Quarterly, 10, 135-142. Retrieved November 4, 2014.In this article, Tibor Machen explains the difference between the legal definition of securities fraud and the business ethics definition of insider trading. I chose this article because it highlights the discrepancies between the two, while exposing common misconceptions of both. This is important because, while both concepts are similar, they have drastically different originations.8. Barry, N. (1991, September 9). The Ethics of Insider Trading. Retrieved November 4, 2014.Norman Barry, in his 1991 article titled “The Ethics of Insider Trading,” argues against the implementation of “social, (as opposed to moral) obligations on business[es] because of the resulting harm it has on business efficiency. He goes on to further explain that, while it is hard to argue against equal opportunity, he believes that the negative effect insiders have on the market is exaggerated, and that “real-world market economies are characterized by radical ignorance.” I like this article because it sheds light onthe effect that an increased crackdown on insider trading can have on the market as a whole and that these effects need to be taken into careful consideration.9. Cohen, A. (2011, December 6). The Morality Of Insider Trading. Retrieved November 5, 2014.This article presents all the different aspects of insider trading as well as several real world examples of illicit


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