Corporate Governance: Insider Information, the Bane of Financial Melt-Down?

Abstract

Words are not enough to express the global financial melt-down. Is it
foreclosure , bad debt, bank failure, tentacles, stock market crash, share
nose-diving, investors havoc or suicide or death- trap, government inability,
business failure, mortgage failure, Fannie Mae-Freddie Mac phenomenon,
bait and switch game, etc; the insider knowledge or information, the
scapegoat? This is the problem investigated in this study. Therefore, the
hypothesis is that the insider knowledge of the manager does not cause the
global financial melt-down. The method is analytical using desk research.
The finding is that the insider information possessed by the manager
informed the manipulation of firms, securities, risky business, terms, prices,
etc, for their benefit to the detriment of investors and therefore caused the
financial melt-down. Finally, the major recommendation is that corporate
governance needs reforms for tighter control and application of full
oversight functions on investment bankers.