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  • Essay / Insider Trading Case Study - 727

    Using information that customers have disclosed while intoxicated is unethical because customers do not have control over their faculties to control the amount and type of information they disclose. It is unclear whether Albert is directly involved in IPOs or simply monitors the emergence of new IPOs in the market and notifies his clients. However, if he is directly involved in IPOs and gives information to his clients about it, this is illegal and considered insider trading. Albert could face criminal charges if he is involved in this activity. Criminal charges are filed and prosecuted in federal or state court (Ferrell, Fraedrich, & Ferrell, 2011, p. 96). Albert's supervisor's request to buy stock and he would “pay the taxes and give [Albert] a small bonus for Christmas (Ferrell, Fraedrich, & Ferrell, 2011, p. 122)” is highly suspicious. At the very least, it would go against fundamental stock market practices. Core practices are “documented best practices, often encouraged by legal and regulatory forces as well as industry professional associations (Ferrell, Fraedrich, & Ferrell, 2011, p. 93).” This could very well be unethical, a conflict of interest or insider trading depending on why his supervisor wants him to buy this.