Insider trading takes place when a person $($or persons$)$ is given information that can affect the price of an equity, but is not available to the public at large. The person then trades based on this information $($an example would be being told by a company director that they will announce very good earnings the next day$).$ The primary stakeholders in the decision on whether to commit insider trading are $($a$)$ the person wanting to do insider trading $($the tippee$)$ and, $($b$)$ the person who gives the insider information $($the tipper$),$ and $($c$)$ the company about which they have the information. Secondary stakeholders are other investors in the market.

The primary purpose of insider trading is to make money for the tippee. This is a huge positive consequence. On the other hand, the insider may go to jail, not a pleasurable experience by any account. Another possible positive consequence is that those who get rich from insider trading will be benefactors to society through their philanthropy, for instance.

For most people, insider trading means trading "unfairly" through information not available to the market. This perceived "unfairness" may cause people to stop participating in the market because the market will be viewed as an non$-$level playing field. If people do not participate in the market, the market will slowly wither. If the market suffers, capital formation and allocation also will suffer and in the longer term, the economy as a whole suffers. This will be catastrophic for many $($just think of the $2008$ financial crisis$)$ and cause wide scale unhappiness.

The negative consequences of participating in insider trading are so overwhelming that it is quite obvious that it is not morally permissible.

Group of answer choices

Consequentialism

Duty Theory

Virtue Theory

None of the above