The insider mini case (you will need to submit this on Moodle) A federal jury convicted a stock trader who worked for a well-known investment firm, along with two alleged accomplices, of insider trading. According to the indictment, the trader got inside information about pending mergers from lawyers. The lawyers allegedly browsed around their law firm, picking up information about corporate deals others in the firm were working on. The lawyers would then allegedly pass their information on to a friend, who, in turn, passed it on to the trader. Such "inside" information reportedly helped the trader (and his investment firm) earn millions of dollars. The trader would then allegedly thank the lawyers, for instance, with envelopes filled with cash. Things like that are not supposed to happen. Federal and state laws prohibit them. And investment firms have their own compliance procedures to identify and head off shady traders. The problem is that controlling such behavior once the firm has someone working for it who may be prone to engage in inside trading isn't easy. "Better to avoid hiring such people in the first place," said one expert. Over lunch at Bouley restaurant at Manhattan's TriBeCa area, the heads of several investment firms were discussing the conviction and why they could do to make sure something like that didn't occur in their firms. "It's not just compliance," said one. "We've got to keep out the bad apples." They ask you for your advice. Questions they asked your Questions they asked you: We were hoping you could design an employee selection program for hiring stock traders. We already know what to look for as far as technical skills are concerned accounting courses, economics, and so on. What we want is a program for screening out potential bad apples. To that end, please let us know the following: what sort of screening test should we use? Why? What questions should we have on our application form? What questions should we ask previous employers and references