Inside Trading
Insider Trading |
In one paragraph supported by your text and other research, describe a recent example of insider trading. Determine whether the case met the elements of insider trading established by the Supreme Court in U.S. vs. O'Hagen, described in the text. Respond to at least two of your classmates’ post
In this case number (2012-255) concerning Insider Trading Ring Investment Banker Illegal Tips on Impending Merger on Dec 5, 2012. The Securities and Exchange Commission today charged an investment banker who was primarily based in Charlotte, N.C., and nine others involved in an insider trading ring that garnered more than $11 million in illicit profits trading on confidential information about impending mergers (SEC, 2012). John W. Femenia misused his position at Wells Fargo Securities to obtain material, nonpublic information about four separate merger transactions involving firm clients (SEC, 2012). Upon learning inside information about an impending deal, Femenia’s first call to set the insider trading ring in motion was typically to his longtime friend Shawn C. Hegedus, who worked as a registered broker (SEC, 2012). Femenia and Hegedus illegally tipped other friends who in turn tipped more friends or family members in a ring that spread across five states (SEC, 2012). This case related to the one from text reading because he had confidential information that he used to make a profit for himself and if the stockholders as well as partner are not given this information it can’t be legally used. In an important legal case, U.S. vs. O’Hagen, the Supreme Court clarified insider trad- ing law (Lawrence, A.T. and Weber, J. 2011). The court ruled that someone who traded on the basis of inside information when he or she knew the information was supposed to remain confidential was guilty of misappropriation, whether or not the trader was directly connected to the company whose shares were purchased (Lawrence, A.T. and Weber, J. 2011).
Reference
In one paragraph supported by your text and other research, describe a recent example of insider trading. Determine whether the case met the elements of insider trading established by the Supreme Court in U.S. vs. O'Hagen, described in the text. Respond to at least two of your classmates’ post
In this case number (2012-255) concerning Insider Trading Ring Investment Banker Illegal Tips on Impending Merger on Dec 5, 2012. The Securities and Exchange Commission today charged an investment banker who was primarily based in Charlotte, N.C., and nine others involved in an insider trading ring that garnered more than $11 million in illicit profits trading on confidential information about impending mergers (SEC, 2012). John W. Femenia misused his position at Wells Fargo Securities to obtain material, nonpublic information about four separate merger transactions involving firm clients (SEC, 2012). Upon learning inside information about an impending deal, Femenia’s first call to set the insider trading ring in motion was typically to his longtime friend Shawn C. Hegedus, who worked as a registered broker (SEC, 2012). Femenia and Hegedus illegally tipped other friends who in turn tipped more friends or family members in a ring that spread across five states (SEC, 2012). This case related to the one from text reading because he had confidential information that he used to make a profit for himself and if the stockholders as well as partner are not given this information it can’t be legally used. In an important legal case, U.S. vs. O’Hagen, the Supreme Court clarified insider trad- ing law (Lawrence, A.T. and Weber, J. 2011). The court ruled that someone who traded on the basis of inside information when he or she knew the information was supposed to remain confidential was guilty of misappropriation, whether or not the trader was directly connected to the company whose shares were purchased (Lawrence, A.T. and Weber, J. 2011).
Reference