IntroductionCorporate ethics are important to all businesses, especially where financial reporting and stock trading are involved. Insider trading, or "the trading of a corporation's stock or other securities by corporate insiders," is an illegal practice that is becoming a concern as corporate mergers and acquisitions become more commonplace ("Insider Trading," 2006). Following is a summary of an article involving the ethical issue of insider trading, a discussion of the ethical theories involved, details of the issue, and a plan for revision and communication of ethics.
Summary of IssueThe issue addressed in the article by Gretchen Morgensen is insider trading. This practice allows those buying shares during periods leading up to acquisitions to realize significant gains, some in excess of 40 percent. While insider trading benefits those who buy shares, it also causes loss to others. "The company that makes the acquisition, for example, may wind up paying more" (Morgensen, 2006, p.4).
English: Metropolitan Life Bldg., Manhattan, New Y...
English: Enron Complex in Houston Texas
Ethical Theory and Moral PracticeIn fact, merger deals may fall apart completely due to the increased price of the acquisition.
Ethical Theories InvolvedThe ethical theory that this article takes on is the duty-based theory. A duty-based ethic is one in which individuals are conceived of as having absolute, inherent moral obligations to some outside source (like God or society) to take or refrain from certain actions, regardless of an individual's particular goals and situation (Hsieh, 1994).
Using the concept of duty to guide moral reasoning often results in conflicts between specific duties, and by upholding to one duty will result in the sacrifice of another duty. In the case of the Whispers, the questions that need to be asked are, is the statistics that are being presented enough to bring a case against the suspected inside traders. If the accusations are correct then the question becomes, is the information that is...