11. Insider Trading

  1. John R. Boatright
  1. Peter-Jan Engelen1 and
  2. Luc Van Liedekerke2

Published Online: 13 DEC 2011

DOI: 10.1002/9781118266298.ch11

Finance Ethics: Critical Issues in Theory and Practice

Finance Ethics: Critical Issues in Theory and Practice

How to Cite

Boatright, J. R. (2010) Insider Trading, in Finance Ethics: Critical Issues in Theory and Practice, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118266298.ch11

Author Information

  1. 1

    Associate Professor of Finance, Utrecht University, Netherlands

  2. 2

    Professor of Business Ethics, University of Leuven, Centre for Ethics, Leuven, Belgium, University of Antwerp, Antwerpen, Belgium

Publication History

  1. Published Online: 13 DEC 2011
  2. Published Print: 9 AUG 2010

ISBN Information

Print ISBN: 9780470499160

Online ISBN: 9781118266298

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Keywords:

  • financial market;
  • insider trading;
  • market manipulation

Summary

Insider trading involves a situation of asymmetric information. This occurs when some market participants utilize information that other market participants do not possess. From an economic point of view, inside information refers to every situation in which some market participants are better informed and others are less well informed about the relevant aspects of the valuation of a share of a certain company. This chapter briefly outlines the legal rules on insider trading in the United States and in Europe. It presents a distinction between insider trading and market manipulation, and between insider traders and misappropiators. The chapter further analyzes insider trading from a utilitarian perspective, a fairness perspective, a property rights perspective, and a market morality perspective.

Controlled Vocabulary Terms

Financial market; insider trading