IntroductionProfit generation is the only driving force that motivates every investor to engage in any business. Without profits, the business would not be a business. The company would close if it were to operate at a loss. Some companies, while trying to maintain profits, have used insider trading to their advantage. Ethically, insider trading should be an ethical practice, but more often some entrepreneurs have used it to the disadvantage of their competitors, business partners and customers. From this practice, the idea that engaging in insider trading is unethical has become common and highly plausible. In his work, DesJardins and McCall discussed three arguments that support the case that insider trading is unethical. This article seeks to explore insider trading by examining the arguments presented by (DesJardins and McCall, 2014). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay From a superficial analysis, inside information is unethical when used legally without letting it harm other business parties. Furthermore, inside information should only be used to guide a company on how it should behave and what kind of support it should provide to its stakeholders in the business world. Therefore, it can be said that insider trading is the sole property of the company and they have all the rights to use it at their disposal. However, internal information can be used maliciously by the company to make profits it does not deserve at a particular point in the business. According to Bainbridge (2013), inside information can be used by the company's top management for their own advantage and thus expose the company to numerous dangers that can even lead to the closure of the business. Thus, people who use inside information for their own benefit do not worry about the consequences of their actions for the company. For example, they can buy shares of a company to accumulate them while waiting for time to sell the shares when prices double. Thevenot (2012) argues that insider trading hides information from the public. As a result, the practice becomes unfair to stock traders as traders would simply buy stocks without knowing the expected trends in the market in advance. The impacts resulting from insider trading become negative for both small investors and the markets. When insider trading is done illegally, it is done in such a way that there is no fair play and also there is no fair supply and demand for shares; all of which are detrimental to the functioning of a strong and healthy capital market. From an economic point of view, insider trading could be very fatal. It weakens the trust and faith of investors, who run at a loss in business, in the investment system. Furthermore, if left unchecked, insider trading prevents people from investing in the capital market. All this results from the lack of information on the part of outsiders, who are therefore quite disadvantaged in the market. However, the above argument has some objections. No matter how disadvantaged the public or investors are, inside information belongs exclusively to the company. It is the company that has done the necessary research and discovered information regarding the business trend or probable business changes expected soon. In some companies, employees are forced to sign employee contracts so that they do not have the right to provide company information to outsiders. It's homework.
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