NCJ Number
146787
Date Published
1993
Length
161 pages
Annotation
This book examines from a criminological perspective issues associated with the offense of insider trading.
Abstract
According to the definition of insider trading, it occurs when a person conducts a securities trade based on information that is confidential or is not available to the general public, such as advance knowledge about a new product or unanticipated profits or losses. Such behavior undermines the fair and honest operation of securities markets. The first chapter provides a historical account of the Congressional intentions in proscribing insider trading as an offense. Chapter 2 presents the legal evolution of the definition of insider trading as developed through judicial decisions. Major court cases are discussed to illustrate how the offense has been interpreted. The current theory advocated by the Securities and Exchange Commission (SEC) holds that outsiders may be held liable for trading on confidential information that has been entrusted to them by their employers or their employers' clients. This theory has been upheld in the influential second circuit court. The enforcement methods used by the SEC are examined in the next chapter. One insider trading case is used to illustrate the route an enforcement action takes. It is the Los Angeles insider trading case against Carl Karcher and Alvin DeShano. Another chapter uses information from previous sections of the book to explain the causes of insider training. The discussion deals with both the motivations of the individual offender and the structural opportunity to commit the offense. The concluding chapter highlights the essential features of insider trading as it relates to white-collar crime in general. Table of cases, 196 references, and a subject index