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It’s Not Supposed To Be This Way – Are You Guilty of Insider Trading?

by Jason on May 12, 2011

Yesterday was a big win for investors and the SEC.  Raj Rajaratnam, a hedge fund manager, was convicted on insider trading.  Over a 7-year period, it is estimated that Raj made nearly $60 million dollars from insider tips and information.  Raj managed one of the largest hedge funds in the world, staking claim to over $7 billion in assets under management.  He faces up to 20 years in prison.

According to Forbes, This was one  of the government’s greatest victories in the crackdown on insider trading, and over the last 18 months the Manhattan US Attorney has obtained 35 other convictions for insider trading.

Clearly this is not the way it’s supposed to be!  Advisors, hedge-fund managers, and other investment specialists are supposed to have their clients’, firms’, and communities’ long-term interests in mind.  Their goal should not be profit maximization at all costs over the short term, especially through illegal means.

I am upset with Mr. Rajaratnam because it continues to mar the industry I’m in.  It dissolves trust during a time where trust in our industry is at all-time lows.  But greed got the best of him.  I’m sorry Gordon Gekko, but greed is not good!  Again, this is not the way it’s supposed to be!

Mr. Rajaratnam, Bernie Madoff, and Martha Stewart all show us examples of the effects of sin on the human race.  Sin numbs our sensibilities, and our desires rule our actions.  Take a look at these apt words written nearly 2,000 years ago:

But each person is tempted when he is lured and enticed by his own desire.  Then desire when it has conceived gives birth to sin, and sin when it is fully grown brings forth death.
(James 1:12-15 ESV)

On a public platform, Mr. Rajaratnam demonstrates what we go through on a daily basis.  We all have desires that lure and entice us away from true joy found only in a relationship with our Creator.  We sin daily thinking our momentary pleasures will bring us lasting joy.  Imagine if your sin was shown around the world!

So what’s the answer?  It’s not merely more regulation in the financial industry, or more hedges for your sin or mine.  The true answer to my sin problem and yours, is a changed heart.  That only happens through a relationship with Jesus Christ.  He came to live a perfect life, one that we never could.  Since God punishes sin, we needed a perfect subsitute.  Jesus came and died the death that we deserved to die.  He took our place by taking our sin.  When we turn from sin in repentance and put our faith in Christ, God looks at us through the lens of Jesus’ righteous life.  It is through him that we are able to have a right relationship with God.

We certainly won’t stop sinning this side of heaven, but we will be different.  Those lustful, greedy, envious desires we once had will be challenged by competing desires for righteousness, justice, and purity.  We’ll need God’s help to fight those wrong desires, but we can change through His help.

Are You Guilty of Insider Trading?

Are you sure you know what insider trading is?  It can be difficult to spot.  Here’s a quiz from Kiplinger’s to find out if you’re guilty of insider trading.

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