Business Ethics Essay Example | Topics and Well Written Essays - 2250 words - 4

Business Ethics - Essay Example Once the announcement took place, trading for the shares skyrocketed and price increased by more than 20 percent, thus, benefiting the people who had previously bought those shares for a premium. The case also reveals that the SEC and other regulators are willing to punish such actions as they are deemed to undermine market efficiency and investor confidence. In fact, they have even gone so far as to freeze Swiss bank accounts. Insider trading has been prevalent since the very inception of stock markets (Ferrell et al., 2012, pp. 83). In the recent past, several prominent names which include but are not limited to Rajat Gupta (Goldman Sachs), Raj Rajaratnam and Jason Goldfarb (Galleon Group), Donald Johnson (NASDAQ), Joseph Skowron and Yves Benhamou Matthew Kluger and Brett Bauer have been disgraced, fined, imprisoned due to insider trading. Although insider trading is one of the most widely discussed and debated issues within the field of business ethics, there is a serious disagree ment amongst experts regarding whether or not insider trading should be made ethical or unethical. This paper makes a brief attempt at exploring and analysing various dynamics of insider trading in light of the above mentioned article. ... e likely to possess information about the company that no individual on the outside knows such as a possible merger, acquisition (as in the case of Heinz), financial results, lawsuits, getting access to new distribution or communication channels, strategic alliances and others. The law does not restrict employees of any company and for that matter of fact even the top management, directors and large shareholders of the company from trading the shares of the company but it does not make it explicitly clear that they should not take any advantage of non-public information (Ferrell et al., 2012, p. 83). In fact, even if an insider reveals a piece of crucial inside information, the law restricts the ability of any outsider to use or act upon that information (Henn, 2011, p. 85). Important here to note is that the timing is crucial in the cases of insider trading. Insiders aware of non-public information can act on that information once that become public. Some companies restrict insiders to act on that information only after 24 hours had passed on that information becoming public in order to avoid any complications (George, 2006, p. 75). Ethical Issue The ethical issue which is under discussion here is that of insider trading. The insiders, clearly, used the information that did not belong to them and used it for their personal gain (Sharma & Bhal, 2004, p. 412). When an asset of any organization is used, without the permission of the owner, for personal gain, the gain belongs to the owner and in this case it belonged to Heinz who has been now been acquired by Buffet’s company. Insider trading is also an ethical issue because while other traders in the market had access to a certain level of information, these insiders used information that had yet not been made