Insider Trading and White Collar Crime

Essay by kidddynamteUniversity, Bachelor'sA+, May 2004

download word file, 6 pages 5.0

There are many different forms of fraud, and one of the more interesting ones is insider trading. Insider trading like many other forms can involve big social networks, and small social networks. The corporate crime that is being committed is that a person or group of people misuses certain information, when they have an obligation to keep that specific information confidential. This can be effortlessly seen in examining the case involving insider trading and Dennis Levine and the Scandal that rocked Wall Street. In it, Levine makes use of his social network, by gaining inside information on mergers and acquisitions, or companies that may go under. 1 He uses this information, and would either buy stocks or sell them, in an effort to make money, before the public gets knowledge of the secret information. The crime is that he and others receive an unfair advantage in getting all of this information weeks or days before it happens, thus allowing them to act on it much before stockholders or the company can adjust, or make similar trades.

This is considered a crime against corporation, CAC, because the Corporation 's stockholders didn't make any money, and the value of the company goes down. It is also strategically pre-planned, by a TLMT, in this case by the senior advisors of a few investment banks, and it also was pre-planned by middle level management teams. Levine relied on colleagues in other investment houses, on young lawyers, and members of the arbitrage community who player central roles in mergers and acquisitions. His success depended on these networks on Wall Street, but they could not be implemented by anyone but him. He was the one who could make the call to his Bank Leu, with an offshore account. At the same time, any of the...