the use of confidential information about a business gained through employment in
a company or a stock brokerage, to buy and/or sell stocks and bonds based on the
private knowledge that the value will go up or down. The victims are the unsuspecting
investing public. It is a crime under the Securities and Exchange Act, for which
Ivan Boesky and others have been sentenced to prison for relatively short terms
and only small fines, considering the percentage impact on their accumulated wealth.
Joseph P. Kennedy, father of President John F. Kennedy, made much of his fortune
in the 1920s by insider trading before it was a crime. When the Securities and Exchange
Commission was created in the early days of the New Deal (1933), President Franklin
D. Roosevelt appointed Kennedy to the Commission on the theory that it took an insider
to catch insiders.
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