Rajat.K.Gupta,a former Goldman Sachs director who the government says that he conspired with Raj Rajaratnam,one of the most dexterous hedge fund manager on wall street,had been privy of valuable information.This valuable information was not meant to be discussed with anyone outside the company.
But who cares? Interestingly,they were not aware of the fact that the government secretly recorded their telephone conversation,generally done in those cases related to drug trafficking/ Organised crime.
So,what exactly dose insider trading mean? Well,it is not properly defined in clear language in the law book.The S.E.C depends on the opaque Section 10(b)-5 and Rule 10(b) of the Securities Exchange Act of 1934,the most confusing provision that make buying or selling any security through manipulative way is illēgālis.S.E.C. should draw some clear explanation about what we mean by insider trading and what we don't.
Last year,S.E.C. charged two railroad workers of Insider trading!The accused,a mechanical engineer and a trainman,become very rich by buying few thousand of dollars of call options on the rail company's shares.
So,time has come that the lawmakers rectify the existing law on Insider trading with a new transparent Act to stop Insider trading which is rampant in wall street.
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