“Greed is the root of all evil” was the famous
line from the movie Wall Street.
Investors and traders like me have the same goal of generating profits
from stocks through price appreciation and dividends. We do our research daily
and read market sentiments that would serve as a basis for our judgements. Most
of us trade fairly in compliance with the rules and regulations that are set
with the intent of obtaining a transparent market. Having transparency would
increase investor confidence that encourages investors to invest within the
market. There are ways in trading that we should practice in order to be
morally responsible however, not all of us play fair in the marketplace. There
are a lot of things that we are not allowed to do but others practice it
because they know that they could get away with it. One of the most unethical practices
that are very famous in the stock market is “insider trading”. Insider trading
is defined as buying or selling a stock on the basis of information that has
not been made public and is supposed to remain confidential. The one who
practice this unfair act is called an “insider”. The Philippine Stock Exchange
has its own set of rules and also in compliance with the rules and regulation
of the Securities and Exchange Commission. Even though they implement measures
in preventing such acts there are still some who gets away with it.
Moral responsibility has
three factors which are causality, knowledge, and freedom. It’s important to
understand these three conditions well enough to be able to judge on your own
whether a party was morally responsible for something (Velasquez, 2012) .
CAUSALITY
Causality is the relation
between cause and effect. The person must either cause the injury or wrong or
else must fail to prevent it when he or she could and should have done so (Velasquez,
2012) .
Insider trading is one issue that is very hard to prove. It will need a lot of
evidence to prove someone that he is guilty. With my entire career in the Philippine
stock market I don’t remember anyone including historical records that was
proven guilty and was sentenced because of insider trading. There were some who
were suspended and fined because of securities fraud but not insider trading in
particular. Many have practiced it and yet they just get away with it every
time. Under the causality rule, it is very clear that the insider intentionally
caused the injury that reduces the effectiveness of the transparent market.
Going into the mind of the insider, I could say that he wouldn’t mind if what
he’s doing is ethical or not as long as he has the opportunity to generate
profit through inside information. An insider could also do something to
prevent it by not disseminating the information or not making the trade unless
it’s disclosed. It is the right thing to do but in reality it never happens and
those who intends to practice and obey the rule on insider trading would only
turn out to be a joke. Although the higher ups have the difficulty in detaining
those who are guilty, one should always be morally responsible for any foreseen
work injuries that could be prevented.
KNOWLEDGE
Knowledge
is the second requirement for moral responsibility. The person must know what
he or she is doing (Velasquez, 2012) . An insider clearly has knowledge of
confidential information and should keep it confidential and not do such
actions within the information. An insider could possibly be removed from moral
responsibility if it fails to meet the obligation of rules that he or she is
genuinely ignorant. In this case, if an individual practiced insider trading
but was not aware that it was prohibited then he or she may be excused. It
clearly doesn’t make any sense to excuse someone that practices insider trading
just because he wasn’t aware of such rules. We are responsible for our
ignorance and for its wrongful or injurious consequences (Velasquez, 2012) .
FREEDOM
The
third requirement for moral responsibility is that the person must act of his
or her own free will (Velasquez, 2012) . We have the freedom to trade and we
have the freedom to do as we like as humans but there are always limitations.
It is common sense to know what is right and wrong that we should not abuse the
power of free will. Insiders have their own free will that does not hesitate
with their wrongdoings. Motivated by greed, insiders are unstoppable. Personal
interest of insiders may seem to be a small issue but in a bigger picture it is
a serious issue that should be dealt with. It makes a market unhealthy having
insiders. As human beings we should be morally responsible in our free will by
being obedient to the rules and regulation and develop self-discipline. We can
control ourselves and avoid wrongdoings if our judgments are not clouded.
Money
makes us different, it changes our character. The way we speak, the way we
react changes time after time. Our moral responsibilities as an individual
towards the society diminish when we are blinded with power and monetary value.
We let ourselves be part of a faction that contributes into damaging the
society. Rationalizations and excuses define our true nature of escaping
responsibility. A moral responsibility that is ours to take in hand but most of
us ignore it and choose to agree with evil thoughts. We face the true enemy
within our wrongdoings and evil thoughts, we define ourselves based on our judgments and actions –the only enemy that we need to endure is ourselves.
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