Inside Information: The Enron scandal in 2001

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Recommended: Need for regulation in the context of financial reporting

The use of insider information is illegal in the United States. Insider information is stock related information that can be obtained many ways to gain large, abnormal gains in the stock market. A popular way to gather inside information is from direct employees of the company. Information on stocks can either be illegal or legal. If the information is publicized for all current or future investors to use, then it isn't illegal. Illegal information becomes unlawful when it becomes privatized from the public, and to be only used by investors in the stock market. The action of using insider information isn’t considered illegal until the information is used in a stock market located in the United States, most commonly the New York Stock Exchange, or NYSE. Investors shouldn't need to worry about whether the information they’re given is illegal. Instead, the government should become lenient and abolish the act that prohibits investors to use insider information. Investors need to come together to protest against congress. If we abolish the act that forbids investors to use inside information, then the economy in general will grow from the freedom given by the government. Milton Friedman and Adam Smith both had similar ideas when it comes to laissez-faire which is referred to as “let it be economics.” Laissez-faire is a theory which opposes to any government interaction in business affairs. Friedman, an American economist, statistician, and writer who taught at the University of Chicago, believed that, “A laissez-faire government policy would be more desirable than government intervention in the economy” (New World Encyclopedia). Friedman believed in a laissez-faire government policy, because he assumed that it would help businesses th... ... middle of paper ... ... J.R. "Why Legalized Insider Trading Would Be a Disaster." Delaware Journal of Corporate Law 38.1 (2013): 247-73. ProQuest. Web. 21 Mar. 2014. Friedman, Milton. “Capitalism and Freedom.” Chicago: The University of Chicago Press, 1962. eBook. Jagolinzer, Alan D. "SEC Rule 10b5-1 and Insiders' Strategic Trade." Management Science 55.2 (2009): 224-39. ProQuest. Web. 21 Mar. 2014. Matthews, Dylan. "Insider Trading Enriches and Informs Us, and Could Prevent Scandals. Legalize It.." The Washington Post 26 July 2013: n. pag. Print. "Milton Friedman." - New World Encyclopedia. N.p., 19 Nov. 2013. Web. 3 May 2014. . Sabino, Anthony Michael, and Michael A. Sabino. "From Chiarella to Cuban: The Continuing Evolution of the Law of Insider Trading." 2011.Web. Smith, Adam. Wealth of Nations. New York: 1776. eBook.

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