Under both ethical and legal analysis the acts are wrongful because the misappropriator uses an unfair advantage and trusted access to information for personal purposes, an abuse of position. Disclosure of false information is fraudulent and manipulative, illegal under the securities laws. It is unethical because shareholders expect their interests to be best served by trust in management. False disclosures are lies intended to affect the investment behaviors of shareholders to whom managers owe their loyalty. The disclosing party's motive to subordinate shareholder's interests in favor of personal interests is another example of unethical and illegal abuse of position.
Most ethical dilemmas present a choice between suboptimal alternatives.
As suggested in 11.c above, fraudulent manipulation is illegal and unethical. In this derivative of the misdisclosure question, the shareholder's and market's shortterm interests in adequate and accurate disclosure may conflict with management's aspiration for longterm successes. However, if management's projections are overly optimistic or based on unrealistic assumptions, shareholders will suffer in both the short and longterm. Therefore, it is hard to justify fraudulent disclosures ethically when much of management's motivation is selfinterested. Probably no corporate governance situation is more susceptible to ethical and legal abuse than when management uses corporate resources to misrepresent corporate conditions in soliciting shareholders' affirmation through proxy voting.