Yaron Answers: Insider Trading Laws

[tanmayasahu]

What about the insiders like the company promoter and board members

[vonGleichenT]

I remember studying this law in an accounting class. Back than I would have the assumption that we need to have an insider trading law. Now, I don't think we actually need one. It's funny how textbooks only give you one side of the story, and totally ignore it the other way around. In the end though almost anything has it's pros and cons.

[joanneortiz]

For that matter, if someone has insider information and their trades start to move prices, a skillful, smaller trader could jump on the back of that and profit. I don't think it would fundamentally alter the types of analysis we traders do.

[gdc]

This is crazy talk. The idea that certain actionable "information" is available to anyone is wrong.

[defianttruth]

"Insider trading" is objective financial fraud which steals from the victimized "outsider", i.e. the normal, honest shareholder.

[defianttruth]

I gotta warn The Ayn Rand Institute. I was CENSORED on this very subject on the Yaron Brook YouTube channel just a few minutes ago. Maybe you shouldn't waste any time and censor me too. GO for it! ;-)

[sbain]

Of course people will have different information, that's fine so long as everyone has access to the same information. The example you give of shorting is an example of someone using information that the market doesn't have - that's the whole basis of insider trading laws.
Essentially, insider trading is a violation of free-markets, it undermines free markets, because equal access to information is one of the pillars of a competitive market.

[mytexasdays]

Disagree with your argument. A board member knowing something about that company telling it to someone who buys or sells stock based on that info is doing something illegal. Martha Stewart went to jail for that. The government is not doing enough to keep wall St on the up and up.