Understanding Insider Trading

What is the primary consequence of insider trading on the stock market?

• It erodes trust and fuels corruption.

• It increases market volatility.

• It encourages more public investments.

• It leads to higher stock prices.

When did serious enforcement against insider trading begin?

• In the 20th century

• In the 21st century

• In the 19th century

• In the 18th century

What was a significant factor that contributed to the rise of insider trading in the 1980s?

• Increased public awareness

• Deregulation of financial markets

• Introduction of new trading technologies

• Stricter enforcement by the SEC

Who was known as the 'junk bond king' and was later convicted for securities fraud?

• Raj Rajaratnam

• Michael Milken

• Ivan Boesky

• Bernard Madoff

What strategy did Raj Rajaratnam use to gain an edge in the stock market?

• He invested in real estate.

• He used public information only.

• He built a network of informants for non-public information.

• He focused on long-term investments.

What new method did authorities use to gather evidence against Raj Rajaratnam?

• Undercover agents

• Wiretaps

• Financial audits

• Public testimonies

What was the outcome of Raj Rajaratnam's trial?

• He was acquitted of all charges.

• He was fined but not imprisoned.

• He received a historic 11-year prison sentence.

• He was banned from trading but not convicted.

What was the impact of Raj Rajaratnam's arrest on Wall Street?

• It increased insider trading activities.

• It had no significant impact.

• It resulted in fewer regulations.

• It led to the collapse of Galleon Group.

What is one method traders use today to avoid detection while engaging in insider trading?

• Relying solely on public information

• Openly discussing trades

• Encrypted messaging apps

• Using public trading platforms

What was the record fine paid by SAC Capital in 2013 for insider trading?

• $1.88 billion

• $3 billion

• $500 million

• $2.5 billion