Year of Award
Master of Business Administration (MBA)
College of Business & Professional Studies
SEC, insider information, misappropriation, compliance, NASD
The Master's thesis, "A Study of the Current Enforcement Campaign Against Insider Trading, and How the Multi-Service Brokerage Firm Can Protect Itself From Derivative Liability," is a study of the current campaign against insider trading and the implications this holds for the multi-service brokerage firm.
The first chapter of the thesis provides an in-depth study of the evolution of insider trading law, including the enactment of the Federal Securities laws, and the theories used by the SEC and the Supreme Court to prosecute cases. The purpose of this section is to show that although there are laws that prohibit trading on inside information, these statutes remain underdeveloped and confusing which causes problems in enforcing the laws.'
The second chapter focuses on the current campaign against insider trading and the vulnerability of the multi-service brokerage firm to derivative liability charges. In conjunction with chapter one, this section studies the legal responsibilities firms have for the actions of their employees and reviews recent court cases, current investigations, proposed legislation and surveillance enhancements, and also reflects the difficult situation multi-service brokerage firms find themselves in today.
Chapter three reviews supervision methods, such as Chinese Walls and Restricted Lists, that can be implemented to assist the multi-service brokerage firm to monitor the activities of employees and clients and that also can provide a defense for the firm should it become implemented in an allegation. Although no security system will completely prevent information abuses, effective supervision methods can help to deter such violations.
Considering the current campaign against insider trading and that the activities of multi-service firms are under intense scrutiny by the SEC, it is imperative that firms review their supervision methods to make sure that they are doing everything possible to deter the practice of insider trading.
Laughlin, Deidre Erin, "A Study of the Current Enforcement Campaign Against Insider Trading, and How the Multi-Service Brokerage Firm Can Protect Itself from Derivative Liability" (1988). All Theses, Dissertations, and Capstone Projects. 533.
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