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Introduction
Insider trading has once again emerged, abate quietly, as a debatably ambiguous crime, demonstrated by recent attempts to prohibit members of the US Congress from capitalizing on finance and industry information that they have privy to, in advance of public notice. Since the trial and subsequent conviction of Raj Rajaratnam (Galleon Hedge Fund Manager) for making approximately $45 million on tips from corporate elites, plus the arraignment of Rajaratnam's younger brother Rengan more recently for similar charges ([7] Bray and Rothfeld, 2013). This type of malfeasance is infrequently pursued through criminal justice avenues, but rather generally handled through legislative and civil court routes, as demonstrated by the whispers of alleged insider trading on Capital Hill in Washington, DC ([29] Mullins et al. , 2010). It is timely to seriously think about the relationship between insider trading, opportunity, and regulatory practices. This was best demonstrated by the insider trading networks that formed during the 1980s on Wall Street, a period of time when there was an increase in mergers and acquisition activity ([15] Hansen, 2004). Though decisively occurring during a different economic climate, comparisons can be made with today's scandals from a standpoint of mechanisms, including corporate culture and regulatory agencies, which have contributed to these types of crimes.
This case study concludes that the regulatory system is faulty, where some are prosecuted and others get away with civil actions (e.g. Rajat Gupta at Goldman Sachs) much as the regulatory systems that are expected to control all types of underground, black market activities. Understaffed and held hostage by politics, the Securities and Exchange Commission has inconsistency monitored financial markets ([16] Hansen, 2009; [17] Hansen and Movahedi, 2010). Though the white collar criminals discussed in this essay are clearly well-compensated in their legitimate occupations, they have one thing in common with all workers within informal and underground economies: there is unreported/underreported income resulting in unrecorded productivity (e.g. IRS W-2s).
If any lesson has been learned from the era of greed in the 1980s, or the present era of malfeasance for that matter, is that no lesson has been learned. As Larry Summers (Former Economic Advisor, Obama administration; Harvard Professor) has recently been quoted as saying, "the four most dangerous words in finance are 'it's different this...