One of the readings addresses insider trading

Activite 1:



One of the readings addresses insider trading and the ethical underpinnings
of the regulation of the practice. However, not everyone necessarily
agrees that insider trading is necessarily a bad thing. Please review this
article: Insider Trading
<http://www.econlib.org/library/Enc/InsiderTrading.html>.

In this article, the author contends that insider trading is a positive
practice. Please take a stand on this issue. Make the case that insider
trading is ethically permissible or that it is always ethically
impermissible. Again, I want you to make an *ethical* argument.

When finished with your response, please respond to a couple of classmate's
comments. Identify a strength or weakness in their argument.



Activite 2:



Consider the case of what is referred to as “soft money” within the
securities industry. According to critics, a common practice in the
securities industry amounts to little more than institutionalized
kickbacks. “Soft money” payments occur when financial advisors receive
payments from a brokerage firm to pay for research and analyst services
that, in theory, should be used to benefit the clients of those advisors.
Such payments can benefit clients if the advisor uses them to improve the
advice offered to the client. Conflicts of interest can arise when the
money is used for the personal benefit of the advisor. In 1998, the
Securities and Exchange Commission released a report that showed extensive
abuse of soft money. Examples included payments used for office rent and
equipment, personal travel and vacations, memberships at private clubs, and
automobile expenses.

If you learned that your financial advisor received such benefits from a
brokerage, could you continue to trust the financial advisor’s integrity or
professional judgment?

· Who gets harmed if a financial advisor accepts payments
from a brokerage? What are the consequences?

· For whom does a financial advisor work?

· To whom does she have a professional duty?

· What would be the consequence if this practice were allowed
and became commonplace?

· Which of the four rationales identified in the Harvard
Business Review article
<https://hbr.org/1986/07/why-good-managers-make-bad-ethical-choices> do you
think explains this behavior? Why?