Topic_11_E1 - Topic 11 Exercise 1 Efficient Markets Small...

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Topic 11 Exercise 1 Efficient Markets Small Investors Should Profit from New SEC Disclosure Regulation Certain forms of insider trading have been practiced quite openly in the securities industry. When a Wall Street analyst sat down to talk with a corporate executive, and then hurried back to his office to tell his firm’s traders to buy or sell on news that the public wouldn’t learn for days, he hadn’t broken the law, until the SEC recently approved a regulation to curtail this practice. The original selective disclosure was allowed because it was believed that analysts were better suited to analyze the significance of disclosures. Called Regulation FD, short for full disclosure, it requires that companies publicly disclose any information given to analysts or select investors such as the people who run mutual funds and pension funds. Many investors and regulators, including SEC Chairman Arthur Levitt, have long criticized such “selective disclosure.” Read the article, “Small
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Topic_11_E1 - Topic 11 Exercise 1 Efficient Markets Small...

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