Date of Award

Spring 5-19-2017

Degree Type

Thesis (Restricted access)

Degree Name

Master of Science (MS)

Department

Interdisciplinary Studies

First Advisor

Margart McCoey

Abstract

Insider trading is the most common form of securities fraud. Today it remains as confrontational as it did when securities regulation formed after the crash of 1929. Having been first recorded in 1792 and increasing in activity in 1929, before the great depression, the movement has evolved over time and is frequently taking place in the United States. (Schoone-Jongen, B. 2015) This action has led to the changes in the law several times in the past century. On the contrary to what many may believe about insider trading is that it is not always considered illegal and illegal insider trading is not always transparent. Insider trading is legal when done in accordance with the Security and Exchange Commission (SEC) standards and is not considered illegal until a person who is considered an insider buys or sells securities in breach of a fiduciary duty or other relationship of trust and confidence while in possession of material, nonpublic information. When an insider uses privileged information to influence trade decisions for personal gain they have taken the turn of illegal practices. This paper will explain both legal and illegal insider trading. It will also focus on the debates of insider trading and how it undermines investor confidence and creates an unfair advantage in the securities markets.

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