International Securities and Finance Essay Example | Topics and Well Written Essays - 500 words

International Securities and Finance - Essay Example mediary used insider information to trade securities of the companies outlined, as they were price affected and thus make high profits than the normal traders (Suzi , 2014). Insider dealing is under the FSA and Securities regulation in the UK. It has been a criminal offense since the year 1985 and currently it is incorporated under the criminal justice Act 1993 Part V. Information that is not available to all parties in the market is deemed asymmetric as traders could use it for their personal gains and make high profits. Efforts have been done overtime to tighten up laws on insider dealing but still there are some who go unprosecuted. Insider dealing is said to be a criminal offense when; the information on hand is price sensitive to the shares trading in the market and when an individual encourages someone else to pass the inside information or deal with the shares that are price sensitive and finally when the dealing takes place through a professional trader or broker and on a regulated market (out-law.com, 2014). For most of the times, people have always thought that insider trading is always illegal, but there are some circumstances where it is legal where the officers, employees, directors, buy and sell stock in their own companies and they report to the reporting authorities of their actions. However, it becomes illegal where the buying and selling of securities involves a breach of fiduciary duty or trust and confidence while in possession of material information that is not available to the whole market. Insider trading is said to undermine investors’ confidence in the market as it does not in any way promote integrity and fairness with some gaining more than others gain. Thus, the relevant authorities should be more stringent in regulating the trading of securities in the market by prosecuting those involved in insider dealings (Mirranda, 2013). The security markets within the UK have faced a lot of criticism from members of the public as issues of