PHI 2397 Study Guide - Fall 2018, Comprehensive Midterm Notes - Insider Trading, U.S. Securities And Exchange Commission, Trust Law

273 views31 pages

Document Summary

The fundamental ethical requirements is to be fair. Substantively: when price of security reflects actual price. Procedurally: when buyers are enabled to determine actual value of security. Financial markets are vulnerable to unfair practices - fraud, manipulation, unfair conditions, contractual difficulties. Aim of federal laws is to ensure fair and orderly markets. Hard to do when there are specular bubbles (housing markets) Unfair because there can be fraud and manipulation. Lead to unfair treatment in securities transaction, loss of investor confidence in integrity of financial market, and excess volatility (caused stock market crash) All parties of transaction do not possess/have access to the same info. Unfair only when the information has not been legitimately acquired (invest) or when its in use violates some right or obligation. Also unfair when misappropriated from the rightful owner and that an insider who trades on information that has been acquired in a fiduciary relations violates a fiduciary duty.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers

Related textbook solutions