The stock market is a place where economists, traders and investors actively exchange fearless forecasts about the performances of companies listed publicly. Each country has its own stock exchange and in the New York Stock Exchange alone, there are hundreds of publicly listed entities.
Among those listed in the NYSE are the Bhp Billiton, Nokia, Barclays and Deutsche Bank. The industries listed and traded range from oil and mining, banking, consumer, services and industrial sectors. Being listed publicly in the stock exchange is a strategic way to raise capital for a company and to bring the company to people. Usually, Initial Public Offerings or IPOs are much anticipated by traders and investors. If your company has already gained solid fundamentals, you can launch it on the stock exchange through the Initial Public Offering. The creators of TV Store Online, an online retailer of shirts, could also opt for their company to go publicly given that they meet the requirements of the Securities and Exchange Commission.
The scandals in trading
The stock market world has been rocked by myriads of cheats and scams. Insider trading cases have been brought to court with defendant’s hopes of acquiring justice. Insider trading is illegal and occurs when investors are pre-informed of the future exploits of a company and would take advantage of such information.
Examples of insider trading cases with filed complaint in SEC are as follows:
• Corporate officers and board directors who traded their stocks or securities after learning of a significant company milestone.
• Friends, families and acquaintances of corporate officers who knew of the information and traded their shares in response to the news.
• Employees of the government who used information to their advantage and traded their share holdings.
There has been a recent case of insider trading filed against hedge fund traders. The Securities and Exchange Commission and Justice Department cried foul over a statement in the court ruling of the case which overturned the convictions of the traders. Both government agencies appealed that the ruling be reviewed because it would be more difficult to catch illegal insider trading masterminds should the court’s decision prevail.
Reportedly around the globe, there are numerous cases of insider trading in the stock market and in other investment vehicles.