Information Issues on Wall Street 2.0
Billions of dollars have flooded new online marketplaces for trading private company stock. These marketplaces stand poised to become important, lasting features of the private company world as they provide a central meeting place for buyers and sellers and potentially increase the liquidity of private company stock. Increased liquidity is particularly important to investors in start-up companies, as these companies have faced longer periods of time before going public or being acquired. The new marketplaces also raise significant information issues, however, that threaten their legitimacy and efficiency. This Article is the first to examine these information issues — lack of information, asymmetric information, conflicts of interest, and insider trading — as well as possible solutions that would allow the markets to continue to evolve while promoting their integrity and investor protection goals. Specifically, the Article proposes establishing a minimum information requirement for secondary trading in private company stock and reexamining the thresholds for accredited investor status in order to ensure that market participants can fend for themselves without additional protections. The Article also examines potential responses to insider trading in these markets, arguing that a case exists for the SEC to take action in the private market context, since harm may be cognizable and the arguments for regulating insider trading are as strong in the private market arena as in the public.
Insider Trading and Financial Economics: Where Do We Go from Here?
Abstract Insider trading is back in a big way. The current fallout from the "Great Recession" exposes the fragility of the financial system in the age of internationally integrated markets. There is widespread confusion about the causes of the current financial turmoil and uncertainty about how to deal with it. At a time when governments are rethinking their existing financial regulatory schemes, enforcement agencies are cracking down on insider trading with increased vigor. It is, therefore, not surprising that the insider trading debate is hotter than ever. This Article argues that the reinvigoration of the insider trading debate is unfortunate. In spite of seemingly unending efforts to settle the debate, we are no closer to answering whether insider trading is even harmful, much less worthy of legal action. Furthermore, the practical reality is that the vast majority of markets regulate insider trading. The literature has stagnated because scholars have, by and large, failed to move beyond the standard arguments about the benefits and detriments of insider trading. This Article challenges the conventional wisdom of framing insider trading research as a search for resolution to the debate. As such, this Article remains agnostic with respect to the desirability of insider trading regulations. It first synthesizes existing research, both domestic and international, and reviews important events that have transpired over the past several years. This Article then seeks to stimulate an expansion of the literature by identifying nine issues that present potentially fruitful research topics at the intersection of work in insider trading and economics. Only by abandoning the debate is it likely that the current boundaries in the literature can be crossed. Introduction More than seventy years after the enactment of the first insider trading laws, insider trading remains one of the most controversial aspects of securities regulation. This is evidenced by the growing body of literature which questions whether insider trading is even harmful, much less worthy of legal action. However, the literature has stagnated to a degree, in that most new research merely adds to the debate within the conventional context. Therefore, I submit that it is time to synthesize the existing research, and then focus on expanding the literature. Recent insider trading-related events have captured the attention of both the academy and the public. Not only have celebrities, such as Martha Stewart and Mark Cuban, been accused of insider trading, but the Securities and Exchange Commission (SEC) has also been embarrassed by a scandal involving alleged insider trading by two of its own enforcement officers. Moreover, as often happens when the economy is in shambles, there has been a lot of finger-pointing by politicians who seek a scapegoat for the current financial crisis. This environment, coupled with the populist perception that the alleged greed and misconduct of Wall Street professionals caused the "Great Recession," has emboldened the SEC in its enforcement activities. I shall endeavor to make four contributions to the insider trading literature. First, I will provide an interdisciplinary synthesis of the existing literature. In the process, I do not limit my analysis to results from one particular country or research perspective. Second, I will review the most important events that have transpired over the past several years. Third, I will provide a novel treatment of nine contemporary issues at the intersection of research on insider trading and financial economics.1 In my discussion of these issues, I strive to bring some attention to new and exciting areas, such as prediction markets. Finally, I will attempt to anticipate "the next big things" that will be of particular interest to insider trading scholars in the future, in the hope that these suggestions will motivate scholars to push beyond the current boundaries in the literature. …
Application of the Kano Model for a Better Understanding of Customer Requirements in Higher Education—A Pilot Study
Various pieces of information and knowledge turn into “know-how” simply by their application in the market. This applies to all spheres of activities. It is therefore important to know and understand the requirements of customers already in the stage of making a product, and to confront these with the possibilities of a producer. In this article we are exploring the possibilities of a better understanding of the requirements of customers and stakeholders in the process of the creation of products in educational services. In particular, we examined seven general requirements: practice orientation, ethical orientation, research orientation, quality resources, innovation orientation, skills orientation, and quality staff. We use the Kano model on a pilot sample of respondents at an institution of higher education. Our results showed that “practice orientation” and “quality resources” are the most stable requirements, while “quality staff” is the least stable. The most linear requirement (the same effect on satisfaction and dissatisfaction) is “innovation orientation”. “Research orientation” belongs to attractive requirements and we also found that in the case of “ethical orientation” there are weak relations between positive and negative responses in our survey. The “skills orientation” proved to be too general, and our research shows that it could be indifferent. It is therefore advisable to specify the investigated skills when investigating requirements on educational services. The main contribution based on the proposed research procedures is an effective linking of customers and producers already from the beginning of constructing a value chain. Investing in sophisticated management approaches when modelling products and processes can thus become a significant source of the competitive advantage of an educational institution. At the same time, it is a contribution to better placing of its graduates in the labor market.