Question 3

Which of the following statements is mostlikely to lead to an effective code of ethics inacorporate organisation?

AIf leadership reflects management's personal values.

BWhen the unwritten code of ethics is effective in influencing behaviour.

CIf the rules on ethical behaviour in the code of ethics are prescriptive and explicit.

DWhen management behaviour is congruent with the principles of the corporate code ofethics.

Case study

Insider Trading: Lawyers say small number of insider trading cases before courts 'tip of iceberg'

By business reporter Emily Stewart

Sources: http://www.abc.net.au/news/2016-06-09/insider-trading-cases-tip-of-iceberg/7497236

Since 1973, there have only been 79 insider trading cases brought before the courts, in what lawyers said could just be the tip of the iceberg.

Last week, investment banker Oliver Curtis was found guilty of insider trading the latest in a string of high-profile cases brought by the Australian Securities and Investments Commission (ASIC).

In that same week, ANZ accountant Michael Hull was sentenced to 17 months in prison after receiving stock tips from a friend at Credit Suisse, making $270,000.

Mr Hull's lawyer, James Wheeldon, told the ABC a lot of insider trading remains undetected.

"If you asked most corporate lawyers or investment bankers in Australia if they thought that most cases of insider trading were detected and then successfully prosecuted you'd get a resounding 'no'," Mr Wheeldon said.

In March, a record sentence of eight years was handed down to former managing director of China's Hanlong Mining, Steven Xiao, while last year, former NAB banker Lukas Kamay received a seven-year sentence for a $7 million scheme with an ABS employee.

Discuss:

(1)What is insider information?

(2)What is the implication of sharing insider information?