Should insider trading be legal?

[Geoffrey Howe]

It seems some serious people who understand this sort of thing much better than I think it should.

[🦀🎂🦀🎂]

Insider? I hardly knew her!

[Torie]

It makes the markets at once more efficient and unfair. If you have an indexing strategy, where you don't play the market, insider trading is beneficial. Insider trading accompanied by fraud (company insiders making false statements), is in another category.

[Filuwaúrdjan]

It seems some serious people who understand this sort of thing much better than I think it should.

Perhaps, but that would be because they want to make a lot of money very quickly.

[Geoffrey Howe]

Yes, because it's a form of securities fraud.

I'm not sure what you mean here. How is it per se "wrongful or criminal deception" (except in the tautological sense of "it is fraud because it is illegal" which misses the question)? The argument for its legalisation, as I understand it, is that the informed trading itself signals market information - as Torie said above, it makes the market more efficient (but also more unfair).

[True Federalist (진정한 연방 주의자)]

As a general rule, no.

That's because efficient financial markets require widespread dissemination of relevant information about the products and legalization of insider trading would encourage the withholding of such information. The arguments put forward in favor of legalizing insider trading assume the information value of such trades, which theoretically could be broadly available sooner than more normal financial information, would sufficiently offset the results of such encouragement, or worse neglect to even consider such results. Should insider trading regulations be tweaked to reduce the amount of time insiders have to avoid acting upon such information? Yes, but it should be by requiring such information be disclosed sooner.

[Torie]

As a general rule, no.

That's because efficient financial markets require widespread dissemination of relevant information about the products and legalization of insider trading would encourage the withholding of such information. The arguments put forward in favor of legalizing insider trading assume the information value of such trades, which theoretically could be broadly available sooner than more normal financial information, would sufficiently offset the results of such encouragement, or worse neglect to even consider such results. Should insider trading regulations be tweaked to reduce the amount of time insiders have to avoid acting upon such information? Yes, but it should be by requiring such information be disclosed sooner.

Interesting response. Sometimes, however, a company  however needs to keep stuff secret for prudential and ethical business reasons, such as product development, least the competition catch on, and do a "premature" copycat.

[Meclazine for Israel]

No.

Ridiculous idea.