First, watch the Frontline episode, “To Catch a Trader” (http://www.pbs.org/video/frontline-catch-trader/). Then answer the following questions:
1. (a) What is the specific SEC rule related to insider trading, and what specifically does its text prohibit? (b) Using simple and clear language, how would you put this rule into your own words?
2. (a) Which case discussed in the episode was the first time federal agents used a wire tap for an insider trading investigation? (b) According to the following article, https://www.bloomberg.com/news/articles/2017-03-30/wall-street-s-whatsapp-secret-illegal-texting-is-out-of-control, what is the major difficulty investigators face today in catching insider trading? (Be specific about the nature of the problem; name-dropping an app isn’t an answer.)
3. (a) What are “expert networks,” and what role or function do they play, specifically in the hedge fund industry? (b) According to James Fleischman of PGR, what is the danger or temptation inherent in what expert networks do, which he wrote was “bound to happen”?
4. Take some time to reflect on the nature of insider trading. In your view, what specifically explains why insider trading is prohibited? Your task for this question is to try to explain as clearly as as possible the deep, moral reason (or reasons) why insider trading is wrong, and NOT merely to restate facts about it. (For example, adultery isn’t plausibly wrong simply because it involves sexual activity; but it might be wrong because it causes someone else distress, or because it breaks a promise you made, or because it shows disrespect, or for all of those reasons, or for some other reason(s) entirely.) Be sure to give an answer that is faithful to your own perspective; do not simply repeat what someone else (whether a religious leader, a utilitarian, your parents, or anyone else) would say unless you personally agree with it. (Also, if you do not believe insider trading is wrong, you may also choose to explain why it is not morally wrong.) NOTE: Extremely brief or superficial answers to this question (e.g., ‘because it’s illegal’) will not receive credit.