Which of the following actions is least effective in preventing insider information misuse?

Monitoring all phone calls made by brokers is considered the least effective action in preventing insider information misuse for a few reasons. While it does provide some oversight, it may not effectively target the actual misuse of insider information. Insider trading can occur through various means beyond just phone calls, such as emails, text messages, or in-person conversations.

Additionally, being overly invasive with monitoring can lead to a culture of distrust within the organization, which might hinder communication and openness among staff. Furthermore, if employees know they are being monitored, they may find alternative methods to communicate sensitive information, making the approach less effective overall.

In contrast, establishing a restricted list for certain securities directly limits access to insider information, while controlling interdepartmental information flow ensures that sensitive data is shared only with those who have a legitimate need to know. Regular training on insider information is crucial for educating employees about the rules and risks associated with insider trading, thereby promoting an ethical culture within the organization.