Sam Stewart Insider Fraud

1. The SEC is often called the “watchdog” of corporate America. How does it assist in preventing fraud?

Publicly traded companies are subject to the reporting and disclosure requirements of the Securities Exchange Commission (SEC). The laws that govern the securities industry were established to provide transparency to investors, creditors and shareholders alike. According to Hoyle, Schaefer & Doupnik, (2015) there are seven major disclosure requirements, the first being a five-year summary of operations to encompass sales, assets, income from continuing operations. Followed by a description of business activities, a three year summary of industry segments to include foreign and domestic operations, a list of company directors and executives, quarterly market price of common stock for the last two years, restrictions on the company’s ability to continue paying dividends, and finally, an analysis of the company’s financial condition, changes in the conditions and results of operation.

The Securities and Exchange Commission has the mission of protecting investors by maintaining fair, orderly and efficient markets. The SEC does this in a number of ways, and firms need to pay attention to these ways in order to ensure SEC compliance. The SEC has enforcement authority over a number of areas related to the nation's capital markets, including insider trading, accounting fraud, and providing false information. The SEC's jurisdiction extends to all securities that are traded publicly. Privately-held companies do not need to register with the SEC (SEC.gov, 2012).

The Security and Exchange Commission is the organization who monitors fraudulent transactions and insider trading. Some experts in ethical behavior consider inside trading the most dramatic form of utilitarian ethics.

The SEC assists in providing investors with reliable information upon which to make investment decision. The Securities Act of 1933 requires most companies planning to issue new securities to the public to submit a registration statement to the SEC for approval. The Securities Exchange Act of 1934 provides additional protection by requiring public companies and others to file detailed annual reports with the commission. Smackey Dog Food, need to file next forms:

The SEC was created due to the stock market crash of 1929 which led to the great depression. The SEC was created to protect investors in security exchanges such as the stock market. It is responsible for oversight of both private investment and corporate investment dealings.

“There must be a strict supervision of all banking and credits and investments; there must be an end to people’s speculation with other money (pg 92).” The SEC was designed to keep security on Wall Street.

The SEC was created to help investors get reliable information about the company they are investing in. The Securities Act of 1933 requires most companies planning to issue new securities to the public to submit a registration statement to the SEC for approval. The Securities Exchange Act of 1934 provides additional protection by requiring public companies and others to file detailed annual reports with the commission. The SEC follows the GAAP’s reporting requirement for financial statements. As for Smackey Dog Food they are a

If you want to report potential wrongdoing to the Securities and Exchange Commission (SEC, you are protected by the SEC Whistleblower Program. The program, created by the Dodd-Frank Wall Street Reform and Protection Act, offers employment protections as well as a monetary incentive to report a tip to the SEC. You don't have to work for a company to report possible fraud, however, finance, compliance and accounting employees are more likely to have access to specific transactions that are potential violations.

Insider trading – insider trading is the trading of a corporation’s stock or other securities by individuals with potential access to non-public information about the

The U.S. Securities and Exchange Commission (SEC) is in place to ensure that people who invest in publicly traded companies are protected, and that an efficient market is maintained in a fair and orderly fashion. The SEC has put in place several laws and rules to ensure that all investors have access to certain financial information before they buy stock in a company. This information is to remain public and readily available as long as the company is publicly traded. This means that the companies that are publicly traded must disclose this financial and other related information to anyone who requests it. Most companies have it posted online on their company website. These rules and laws ensure that investors are making informed decisions both before they buy stock and the entire

SEC whistleblowers who provide tips about possible unlawful conduct are heroes, although they rarely see themselves that way. Anyone who is considering alerting the U.S. Securities and Exchange Commission (SEC) about irregularities that involve their employer, colleagues or friends has probably wrestled with the decision for a while before taking action. People who find the courage to report potential violations should remember that they are protecting investors who are saving for retirement or their child's college education.

The stock market is the market where shares of publicly owned companies are issued through exchanges or over-the-counter markets. Some individuals, such as R. Foster Winans, will attempt to cheat the stock market and make profits illegally through insider trading. Insider trading is an illegal activity where people will trade stocks based on confidential information. R. Foster Winans was charged with insider trading because of his knowledge of what would appear in the Wall Street Journal’s, “Heard on the Street Column.” R. Foster Winans got the punishment he deserved for insider trading on the stock market.

In the criminal case, US v. James Herman O'Hagan (1997), and in the civil case, McDonald v. Compellent Technologies, Inc. (2011), both cases involved the criminal act of insider-trading that were tried in different court systems. Insider-trading is an illegal act involving an individual who has access to nonpublic information about a public company’s stock or other securities who uses the information to make profits that are not available to regular investors. The seriousness of insider-trading relates to the economic downfalls related with the act that affect economic markets. Insiders have an abundance of information that is not yet available to the public, thus, making the insider-trades unfair and illegal of insiders who take advantage to profit from information that has not been released to the public for public trading and transparency (Cui, Jo & Li,

The primary constraint on firms' ability to permit their insiders to trade on the basis of the nonpublic information they obtain in the course of the employment is rule 10b-5, which is the SEC's principal weapon against insider trading. The SEC's authority to enact rule 10b-5 is based on 10(b) of the 1934 act, a broad provision that authorizes the SEC to prohibit "any manipulative or deceptive device or