Case study Coursework Example | Topics and Well Written Essays - 500 words

Case study - Coursework Example Rajaratnam had a continuous pattern of using insider trading to make millions of dollars in profits. Typically insider trading occurs as one time tips that a person exploits. A smart insider trader will not abuse his knowledge to earn money to stay off the radar of the Securities and Exchange Commission (SEC). Greed was the primary factor that led to the demise of Raj Rajaratnam. The financial market suffered a risk in regards to the integrity of Wall Street as a whole. The SEC discovered during its rigorous investigation of the insider trading activities of Raj Rajaratnam that insider trading was more widespread across America than what the authorities thought. Raj Rajaratnam had a network of informants he paid for the insider information he used. During the investigation 16 people were charged with financial crimes. It appears as if insider trading is more widespread than anyone ever thought. The reason insider trading is illegal is because it gives the recipient of the information an unfair advantage in comparison with the typical investor2. The stock market is supposed to have asymmetry and everyone should have the same information. It is my opinion that the judge was completely correct in the harsh sentence he gave out to Raj Rajaratnam. The judge said, â€Å"His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated.† Insider trading is no joke; it hurts the integrity of the financial market, while at the same time giving an unethical trader an advantage which he can capitalize to receive a personal benefit. Rich insider traders can affect the whole market by making huge buy or sell orders on a particular stock. The large trade can alter the day’s price quotation on a stock. Raj Rajaratnam was a greedy dragon that wanted to get rich quick at the expense of the investor community. It is a bit sad that Raj Rajaratnam resorted to the illicit activity since he was already a millionaire and he did