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SEC and Technology

SEC’s Tough New Offensive on Insider Trading

Recent schemes like Galleon Management and the infamous ponzi scheme of Madoff has made the SEC step their so called “game” up. The SEC is trying to get legislation passed to allow the flow of information between themselves an other agencies easier and more efficient. The recent case with Galleon Management relied heavily on informants an wire taps which is very unusual for white collar crime. The tools that they used in this case resemble that of drug and mafia investigations.

This case should let all people in the business world know that the SEC new investigations are more advanced in technology and tactics to catch insider trading and other business oriented schemes. This article relates to our discussions in class about the distribution of wealth. These rich business people keep getting richer through loopholes of the system and tricking the undereducated who lose their life savings. Do you believe that the SEC should have more power and resources to catch these white collar crimes?

Categories: Uncategorized
  1. kherm
    October 26, 2009 at 12:13 pm

    In my opinion the government should choose a well balanced approach in solving this problem. On the one hand, it is important to have useful instruments to prevent insider trading, but on the other hand I would not appreciate to live in a country which is able to control everything, especially my private life.
    To relate my comment to the issues we have already discussed in the class, I would like to mention the Libertarian as well as the Utilitarian point of view, and relate both of them to issue “insider trading”. From the Utilitarian standpoint, an unequal distribution is not desirable, since the “declining marginal utility of money” favors an equal income distribution. Thus, if insider trading increases the salary of only a few people, but on the other hand, hurts the poor it is not acceptable. From the Libertarian viewpoint, it is not acceptable to restrict individual liberty; thus, new rules to prevent insider trading are not tolerable.
    Eventually, I think both approaches should be considered when regulating the market. On the one hand, I would not appreciate as a banker if the SEC is able to control my whole life, but on the other hand, insider trading has to be prevented. Therefore, a good balance is needed, which I know, is very difficult to find.

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