On January 16, 2008, the SEC charged two former employees of PricewaterhouseCoopers LLP with insider trading. According to the SEC’s complaint, Gregory B. Raben, a former PwC auditor, and William Patrick Borchard, a former senior associate in PwC’s Transaction Services Group, used their access to sensitive information about PwC’s clients to allow Raben to buy stock ahead of a series of corporate takeovers. According to the complaint, Raben netted trading profits of more than $20,000 by buying stock ahead of public announcements disclosing the acquisitions and then selling his shares. Assume the actions of Raben and Borchard had no effect on the client or its operations. What is wrong with allowing the actions of Raben and Brochard from an ethical perspective? Would disclosure of the acquisition of client stock (and then continue with) to the client solve the problem you identified? What about disclosing it to the public?
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