
U.S. Pursues Sweeping Insider-Trading Probe - ph0rque
http://online.wsj.com/article/SB10001424052748704170404575624831742191288.html
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rajat
2 points about this leaped out at me:

Firstly:

"Sweeping insider trading probe" that involves "multiple insider-trading
rings" which "reaped illegal profits totaling tens of millions of dollars..."
That's it? Sweeping obviously does not apply to the actual trades since tens
of millions of dollars involves a couple of seconds of trades. Given the size
of our securities markets, this is not even peanuts in scale. "Pervasive
insider trading networks" would have to involve at least a significant
percentage of a billion dollars, if not multiple billion dollars.

I'm not arguing about the illegality or the ethics of this; just the
characterization of this being so incredibly important.

Secondly:

When discussing whether insider trading should be illegal or not, keep in mind
that the U.S. Congress has thoughtfully exempted themselves from insider
trading rules. Ethics, like taxes, is only for the little people.

------
mkramlich
Having "insider trading" be illegal always seemed a bit comical to me. Not
because I necessarily think it is not unethical (I see arguments both for and
against it) but because in a world where people are allowed to meet together
and communicate, freely, with privacy, in "secrecy" and nothing recorded,
then, well, I think it's inevitable that it's going to happen. Person A knows
X. Person B can profit if he were to learn X. Somehow, person A's knowledge
gets to B, either directly or through some middle-man. B profits. Person A
gets some sort of renumeration, perhaps directly, perhaps more indirectly. It
is so easy to setup whatever indirect chain of communication or renumeration
you desire in order to achieve "secrecy" and/or legality and/or plausible
deniability. Not to say that I've done it. But I have done it as a thought
experiment to figure out how it could work. And there's plenty of
circumstantial evidence that others are doing it for real.

Reminds me of how prostitution is illegal (in most places) in the US. But only
if done in the most literal and narrowly-proscribed and blatant of ways. But
if it's in a little more indirect or creative way, suddenly that's legal.

------
sireat
It seems US is trying to make application of
<http://en.wikipedia.org/wiki/Mosaic_theory> illegal, which would be
incredibly silly.

There always has to be some information on a company, which will not be
available to general public.

In my book there are two typos of insider trading:

One, where Bud Fox tailgates Sir Larry Wildman and thus allows Gekko to put
the pieces together as to which the next takeover target will be. (lets set
aside the fact that Gekko had bribed someone on Wildman's payroll)

Assuming the information was gathered using public means, this type of trading
should be legal.

Second type,where Bud Fox gathers information from various offices with his
cleaning crew obviously should be illegal, perhaps not because of the trading
that follows, but just because it is breaking and entering in effect.

Another point could be made that insider trading being made illegal obscures
transparency in the markets. If company principals were allowed to trade in a
shorter time-frame but with full disclosure, markets could absorb the
information better.

------
kiba
Inside trading is a good thing. It bubble up information to the surface.

~~~
mkramlich
So does theft. ;)

