I am trying to write a paper analyzing four different viewpoints on insider trading: Legal/Ethical, Legal/Unethical, Illegal/Ethical, and Illegal/Unethical. Each case should consider SEC/CFA...

I am trying to write a paper analyzing four different viewpoints on insider trading: Legal/Ethical, Legal/Unethical, Illegal/Ethical, and Illegal/Unethical. Each case should consider SEC/CFA guidelines plus consequentialist, nonconsequentialist, realist, pragmatic, idealistic, and existentialist thinking. Can someone help me frame my argument?

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jameadows eNotes educator| Certified Educator

Insider trading, which involves using information that is not public to buy or sell stocks, is illegal in the United States and in most countries. In the US, sections of the Securities Exchange Act of 1934 regulate insider trading, and insider trading is currently regulated by the SEC. The CFA also states that insider trading is illegal for its members. As it is illegal in most countries, the question is whether insider trading should also be considered unethical. 

Different philosophical schools of thought address this question. In the consequentialist tradition, the "ends justify the means." In this case, if one were to profit from insider trading, that would justify using it. Non-consequentialist thinking does values not only the ends but the means. In other words, a non-consequentialist perspective would consider insider trading unethical because the means by which people procure benefits from insider trading allow different people unequal access to information.

Realists believe that our beliefs only represent an approximation of reality, so they might consider insider trading ethical, as they wouldn't believe there is any way to truly understand reality. Pragmatists believe that an idea can only be understood through its practical consequences, so if it is practical to benefit from insider trading, they would be in favor of it and find it ethical. Idealists, on the other hand, believe that consciousness, not reality, is the only knowable entity, so they would likely believe that the intent to commit insider trading represents the reality and find the practice unethical. They would not be concerned about whether insider trading had any real effects, as they don't believe that reality can ever be truly understood. Existentialists value authenticity and freedom, so they would likely find insider trading unethical, as a person benefiting from insider trading would not be acting with authenticity.

Therefore, if you decide that insider trading is ethical, you would use a consequentialist, realistic, or pragmatic school of thought to represent your choice. If you decide that the practice is unethical, you would use a non-consequentialist, idealistic, or existentialist argument.