Can Oliver Stone's Wall Street movies stop insider trading?

Research Question: “How can watching the two Wall Street movies prevent insider trading?”


#movies #governmentsurveillance
Insider trading can be defined as "the illegal practice of trading stock based on illegally obtained information." It is different from regular trading because regular trading is done without inside tips from higher sources such as government officials. For example if a lawyer used information from his case to trade stock that would be illegal and defined as insider trading. Wall Street and Wall Street II are two movies about insider trading. The dram of the two movies are American Drama. These movies differ from other insider trading movies because you see the insider trading effects on the economy and in people's lives.

Research Question: “How can watching the two Wall Street movies prevent insider trading?”

Insider trading can often be a difficult to define topic. Swapping friendly information between friends over some steaks about a stock about to crash to many can be seen as friendly banter. But if those friends happened to be a high power attorney and a fortune 500 CEO then the SEC will be throwing red flags. Wall Street and Wall Street II: Money Never Sleeps are great medians to better identify insider trading. Watching these two movies can help the general public identify insider trading. In the movie you witness several obvious insider trading. An example in the movie is when Bud Fox sells information to Gordon Gekko for representation. Bud Fox, who is an entry level stockbroker with very ambitious dream of taking over Wall Street gets himself in trouble when trying to jump the bullet. For Fox to be successful he needs to acquire high level clients such as Gordon Gekko. Gekko to most is described as impatient, selfish and most obvious, greedy. In the scene where Fox meets Gekko, we see the business man side of Gordon. There are 3 assistants in the room and he has two phone lines open for both ears. Fox is allowed only a few minutes to catch Gordon’s attention. He pitches every legal stock advice which all falls to deaf ears. Only when Fox gives insight to illegal information is when Gekko is interested and we see the heinous side. The big deal about insider information is that most people aren’t at a position to take advantage of pivotal cases, hearings, laws and trials. The reason Gekko listened to only the illegal tip offered from fox about an airline case being overturned is because he saw that Bud Fox was at a position that wasn’t fare. The main reason insider trading is illegal is because only a few have higher access to information and if those few take advantage of their position then it is not fair to the public trading in legal methods.
Another example is Bud Fox following a CEO around to find out about his investments and then giving that information to Gordon Gekko. Again, insider trading’s biggest problem is the level of fairness for all people to trade. In the movie, Bud Fox is sent by Gekko to discover why Sir Larry Wildman is in town for business. Sir Larry Wildman, like Gekko, is a corporate raider. A corporate raider is someone who takes a large amount of debt to buy a company and then flip those companies to cover their debts and make a profit. Knowing what Sir Larry Wildman is in town for would give Gekko an edge on the competition. Again, not fair. Fox goes through every length to obtain information. He goes to the restaurant Sir Wildman eats at, he sneaks into the office of Sir Wildman after impersonating a janitor and even goes as far as digging through trash. All to obtain and illegally trade information for profit.

In Wall Street II: Money Never Sleeps, insider trading becomes more globalized. Insider trading can also be defined as spreading rumors as a higher level trader or government official for the profit of your company or the deterioration of your competition. In Wall Street II, Bretton James, who is the head of the largest hedge fund in the world, shared false rumors about faulty subprime mortgages to ruin Louis Zabel’s firm.  Bretton (who is later arrested for insider trading) used his form of insider trading to ruin his competition. Because Bretton is at a level at which his occupation can be used to persuade a large majority of the public, he can easily ruin a company which he did. It also puts him at a vulnerable position to be arrested for insider trading in which he was. What Bretton did was start a wildfire that ultimately caused the demise of the financial sector. He first told stockbrokers about the problems of his rival and from there it went to the clients. Those who trade illegally not only hurt the competition but also the branches the competition touches. Meaning that our economy is so sensitive and globalized that one rumor can ruin it.
Another example is Jake Moore, played by Shia Labeouf, spreading more rumors to avenge his companies decline. After discovering that Bretton was behind the rumors of the demise of Louis Zabel’s firm, Jake Moore decided to use his position to avenge the firm. Again, using a higher trading position with greater access to information for your own profit is insider trading which is exactly what Jake Moore did. He shared every kind of false rumor ranging from Bretton holding the same faulty subprime mortgages as Louis Zable to the company making bad investments in Africa. Because of these movies, insider can better be identified to the public eye because of the examples that these movies present. 

So What?

My topic is important because I am researching how watching these movies can give better insight into insider trading. The two Wall Street Movies are simply used as a medium to showcase the portrayed reality of what really goes on in the concrete jungle. This information is important to the readers because now the reader is informed on what insider trading is. Because the reader now knows what insider trading is and examples of it, they can help identify those in higher positions that trade information and stock illegally and ultimately help stop insider trading and assist the SEC so that all trades are fair and even. Once insider trading is held to a minimum, my readers can now feel free to trade knowing that all trades are fair.

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