Listen, understand, and create an opinion on insider trading based off the listed article.

**Assignment instructions have been listed below. I have attached the article and also assignment rubric.

This paper should consist of five paragraphs (which are outlined below). Remember that each paragraph should contain at least 2 substantive sentences and is expected to be 5-8 sentences in length.

Additionally, note that I am asking specific questions, indicating exactly what should be explained in each of your five paragraphs. Make sure that you answer all the questions that have been posed. (Also note that there is no “introduction” or “conclusion” paragraphs for this writing assignment.)

Finally, remember that your paper should include citations referencing both the article and the course textbook. Those should be the primary sources utilized in the preparation of your submission.

1. Your first paragraph will be an introduction, of sorts. You need to clearly explain what insider dealing (insider trading) is. What is happening when insider dealing occurs? What would cause an action to be classified as an instance of insider dealing? Also, in this first paragraph, you need to clearly explain the two different types of persons who might be identified as insiders (primary insiders and secondary insiders). Make sure you explain these in ways that clearly makes a distinction between these two classes of individuals. There are four things that I expect to find clearly explained in your paragraph: 

1. 1. The definition of insider dealing/trading, clearly explaining what causes an action to be identified as insider dealing/trading.
   2. Those who would be identified as primary insiders. What specific things place an individual in this category?
   3. Those who would be identified as secondary insiders. What specific things place an individual in this category?
   4. A clear distinction between primary and secondary insiders.

Note that the information that you need to focus on for this paragraph is found on the first two pages of the article (pages 265-66).

For your 2nd and 3rd paragraphs: In the article, after explaining how utilitarianism and duty ethics operate, the authors present claims about insider dealing, all of which they claim are based on utilitarian thinking. This section begins toward the top of page 270, in the paragraph that begins with the words, “The utilitarian approach to the regulation of insider dealing …” This section continues through the first paragraph on page 271.

Here is what the authors are doing. First, they explain (in the first paragraph of this section) why some people argue that utilitarianism would say that insider dealing is wrong. After this–in the last five paragraphs on page 270, plus the first paragraph on page 271–they present six utilitarian arguments which show why utilitarianism actually supports insider dealing. That is, in those six paragraphs, they are trying to show why the objections to insider dealing from a utilitarian perspective are wrong. Your second and third paragraphs will be dealing with those utilitarian claims–both against insider dealing (what others have claimed), and in favor of insider dealing (what the authors say in response to those claims).

Note that the last paragraph on page 270 presents an argument that I will be asking you to focus on in your fourth paragraph. So, for paragraphs 2 and 3, you should avoid using that particular argument. That leaves you five arguments to choose from. Also note that, since you should have citations in your paper referencing the textbook, this would be a good place for that. After all, you are explaining utilitarian claims in your second and third paragraphs–and we learned about utilitarianism in Chapters 5 & 6 of the textbook.

2. Considering everything I have just stated, what you need to do in your second paragraph is to explain one of the arguments presented by the authors. First, explain the claim that some people would offer that suggests that insider dealing is wrong. Next, explain how the authors respond to this claim, arguing that insider dealing is morally acceptable. While doing this, explain how the authors are basing their response on utilitarian thinking, and assess whether they have applied utilitarianism correctly. There are four things that I expect to find clearly explained in your paragraph:

1. 1. The claim to which the authors are responding (that is, a utilitarian claim that suggests a reason that insider dealing should be considered wrong).
   2. The response offered by the authors (suggesting that insider dealing should be viewed as morally acceptable).
   3. The utilitarian basis for the response offered by the authors. How are they using utilitarianism in their response?
   4. An assessment of whether the authors have presented a good utilitarian argument in their response. That is, does the claim made by the authors sound like what utilitarians would really say?

3. In the third paragraph, you will do the same as in the second paragraph—with a second of the five utilitarian arguments presented in the article. I am expecting to find the same four things with regard to this second argument that you are explaining.

4. In the last paragraph on page 270, the authors suggest that—from a utilitarian perspective—bans on insider dealing simply shift the “winners” and “losers,” rather than addressing the real problem that is at the heart of the issue. In the first paragraph on page 272, the authors revisit this claim—from a deontological perspective—claiming (once again) that bans on insider trading simply shift who has an advantage, but fail to address the real issue. In this fourth paragraph of your paper, you will explain how the “winners” and “losers” shift. Who are the winners/losers if insider dealing is allowed, and who are the winners/losers if insider dealing is banned? You also need to identify the real problem that lies at the heart of the issue, and explain why bans (or the lack of bans) fail to address that underlying issue. There are four things that I expect to find clearly explained in your paragraph:

1. 1. Who the winners and losers are when insider dealing is allowed.
   2. Who the winners and losers are when insider dealing is banned.
   3. What the real problem is, which these bans cannot address.
   4. Why bans are incapable of addressing the real problem.

For your 5th paragraph: In the fourth paragraph on page 271, the authors suggest (based on an article by Moore) that insider dealing is acceptable, because allowing one person to have an advantage does not violate any deontological principles. They compare it to a journalist who “scoops” the competition. Thus, there are no deontological reasons to ban insider dealing.

In the last paragraph on page 271, the authors suggest—still based on deontological reasoning—that we shouldn’t worry about insider dealing because, in the end, no one has an advantage. Because insider dealing leads to informational efficiency in the market, any advantages that an individual might possess are ultimately erased.

These claims seem to be at odds with one another. One of them suggests that, from a deontological perspective, we should not worry about one individual having an advantage over others; the others suggests that, from a deontological perspective, this is a moot point, since there is no real advantage.

5. In your fifth paragraph, you will be explaining the arguments I have just mentioned. You will need to explain the tension that exists between these arguments. More specifically, you need to evaluate their arguments, determining whether both claims are truly based on deontological reasoning. Is one of their arguments more clearly deontological than the other? How can we tell? There are five things that I expect to find clearly explained in your paragraph:

1. The first of the claims, from the fourth paragraph on page 271. Explain the argument presented by the authors, suggesting that deontology has no problem with insider dealing.
2. The second of the claims, from the last paragraph on page 271. Explain the argument presented by the authors, suggesting that deontology should not worry about insider dealing.
3. Clearly explaining the tension between the two claims—why they cannot both be accurate deontological claims. In what way do they contradict each other?
4. Identifying which of the two arguments presents a stronger deontological claim.
5. Providing reasons that clearly demonstrate the deontological basis for the better arguments, as well as explaining the flaws in the weaker argument.

Note that, since you should have citations in your paper referencing the textbook, this is another good place to include information from that source. In your fifth paragraph, you are determining which of two arguments makes a stronger deontological claim. We studied deontology (duty ethics) in Chapter 7 of the textbook. So, what information from the textbook can you utilize to help show how one of these arguments is better than the other, from that moral perspective?