Prosecutors representing the Securities and Exchange Commission recentlyannounced criminal charges against 13 individuals for engaging in insidertrading. According to the SECs director of enforcement, a trading ring acting on inside information compromises the marketsintegrity and investorstrust. . . . Explain why.

Answer and Explanation:

Insider trading compromises the integrity of the market because insider investors have non-public information about the stocks of the company that could very much impact the value of the stock of the company. In other words, an insider knows what the public doesn't know about a company and it allows him an unfair advantage to trade the stocks of the company using this information and make large unusual profit. This could lead to market collapse as investors are no longer encouraged to invest seeing that they can't trust that the market is transparent and trustworthy(they don't have all the important information that would affect the company)

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.