Wednesday, 12 September 2012

Insider Trading

Insider trading is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access to non-public information about the company. Mostly insider trading is an illegal activity. 
Some analysts say that insider trading raises the cost of capital for securities issuers, thus decreasing overall economic growth. However, economists cannot be confident of this conclusion because data on illegal insider trading is not available; the nature of the activity renders it impossible to gather data.

An international insider-trading case that has been in the news for the past 2-3 years, with respect to insider trading in Goldman Sachs, has involved a few Indian-born people: Raj Rajratnam, a Sri Lankan buisnessman has been accused of running the biggest insider-trading operation in recent history. Involved Indians are Rajat Gupta, Managing Director: of McKinsey , Chairman of ISB. Also Rajiv Goel, Intel Corp's India-born former managing director.

No comments:

Post a Comment