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Insider Trading in Galleon Groups

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Added on  2020-03-23

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Introduction: 3 Question 1: 3 Information Gathering Techniques: 3 Investigation Techniques: 4 Prevention of Insider Tradings: 5 Role of Financial Regulators: 6 Question 2: 6 Risk Factors Related with Confidentiality: 6 Incident relating Galleon groups and Goldman Sachs: 7 Stock Trading: 7 Question 3: 7 Cover-Ups: 7 Investigation and Conviction: 8 Impact: 9 Conclusion: 10 References: 11 Introduction: Insider trading is a term that explains the exchange of securities of any organisation by any person, who

Insider Trading in Galleon Groups

   Added on 2020-03-23

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Running head: INSIDER TRADINGINSIDER TRADINGName of the StudentName of the UniversityAuthor note
Insider Trading in Galleon Groups_1
1INSIDER TRADINGExecutive Summary:Aim of this report is to study the case of Galleon groups related with insider trading. The illegal and unethical ways of gathering confidential information about other organisations by the director of Galleon groups Raj Rajaratnam and the involvement of other employees from different organisations have been studied. Effectiveness of leakage of non public business information in order to manipulate stock trading and gain of huge profits has been understood. The investigation method and penalties for inside trading have also been noticed.The report has been concluded providing the answers of various techniques that can prevent insider trading. It also explains the role of different bodies in prevention of insider trading.
Insider Trading in Galleon Groups_2
2INSIDER TRADINGTable of ContentsIntroduction:...................................................................................................................3Question 1:.....................................................................................................................3Information Gathering Techniques:...........................................................................3Investigation Techniques:..........................................................................................4Prevention of Insider Tradings:..................................................................................5Role of Financial Regulators:.....................................................................................6Question 2:.....................................................................................................................6Risk Factors Related with Confidentiality:................................................................6Incident relating Galleon groups and Goldman Sachs:..............................................7Stock Trading:............................................................................................................7Question 3:.....................................................................................................................7Cover-Ups:.................................................................................................................7Investigation and Conviction:....................................................................................8Impact:........................................................................................................................9Conclusion:..................................................................................................................10References:...................................................................................................................11
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3INSIDER TRADINGIntroduction:Insider trading is a term that explains the exchange of securities of any organisationby any person, who has the access to the non-public security information of that organisation.The process can be described as a legal or an illegal process depending on the time spanwhen this trading is occurring (Agrawal and Nasser 2012). If the material securityinformation about any organisation remains non-public then this practice can be explained byan illegal procedure. The process only remains legal when the owners or the directors of thecompany sell shares or bonds via legal transaction. Due to this illegal trading otherstockholders of any organisation faces many disadvantages (Agrawal and Cooper 2015).The following report contains a discussion about a case of insider trading took placein a private owned hedge fund company, The Galleon Group. The company earned own andothers’ profit by management of stocks, hedge funds and portfolios for other investors,resulting in an investor income of approximately $7 billion (Denis and Xu 2013). In 2009, thehead of the company Raj Rajaratnam had been accused in 14 different cases of conspiracyand security deceit majorly related to insider trading.The purpose of this project is to study the case thoroughly and identify the key points.Depending on those key points some questions are needed to be answered which areassociated with information gathering techniques that had appeared in this case, effect ofsharing confidential security information of the organisation and effectiveness of accusingRajaratnam and others in order to stop further inside trading across the world.Question 1:Information Gathering Techniques:In order to gather information Raj Rajaratnam had used several techniques which arevery much common in Wall Street. The general technique of gathering information aboutdifferent other companies is either to plant informers in that specific organisation ororganisations or to convince some employee of another organisation to share confidentialinformation about that company (Vishwanath 2015). This process of sharing information cantake place through different networking media like telephone, fax and exchanges ofdocument.
Insider Trading in Galleon Groups_4

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