Business Ethics: Defining the Insider

Who is a Wall Street insider? Under the Securities Exchange Act of 1934, insiders are defined as officers, directors and major stockholders of corporations, and are sternly prohibited (maximum sentence: two years and $10,000) from using inside information for private gain on the stock market. But the law does not reach thousands of people who are not really in but are far from out: financial reporters who are often the sole outside possessors of inside information before the story is published, friends who get tips from directors, securities analysts whose research allows...

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