Stock Market Essay Example | Topics and Well Written Essays - 1250 words

Stock Market - Essay Example Disclosure is called for to be simultaneously carried out to all investors and therefore, nobody should profit from usage of such information before it reaches the public domain. Information cannot be said to be price-sensitive if it’s not factual or specific. Examples may include: Financial information about profits and losses, figures of sales of a company, take over bids information, big buys or disposals of shares by large shareholders, among others. The rules governing the London stock exchange stipulate that any price-sensitive information should this be made publicly available in the reasonable time so as to have a similar influence on the investors’ decision. (Graeme Pietersz, 2009) This is going to be a study related to price-sensitive information and its set out to answer, comprehensively, the question, â€Å"How has price-sensitive information evolved and how has it influenced the stock markets in U.K and U.S?† Use of price-sensitive information was legal, but before 1980. It could be applied by employees and people with close connections to a company. This resulted to insider trading because there was asymmetric information usage. Banning of insider dealings is seen as a later issue. Until 1980, insider trading was not a criminal offence. (Chadwick et al, 2002 p152) People convicted for breaking the insider trading rule are required under IDA 1985, to be sentenced for up to six months imprisonment of be fined an amount not more than the statutory maximum or in other cases both. If convicted under the crown court the person may be sentenced for up to seven years or affine that’s not limited or in other cases both. Since the 1985’s IDA Act, however, the record of enforcement is dismal. Conviction rate is said to be at low levels where about 50% have been convicted on this rules breaking. Low levels of conviction have been blamed to the so strictly set