

The War on Insider Trading: Market-Beaters Beware - mootothemax
http://www.nytimes.com/2011/09/25/magazine/in-the-insider-trading-war-market-beaters-beware.html?pagewanted=all

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ShawnJG
I would first like to preface this by saying that I think insider trading is
wrong. And individuals who blatantly and obviously take advantage of
privileged private information for profit should be punished. However for most
cases I find that the punishment far outweighs the crime. When bankers and
CEOs on Wall Street manipulate the market for their own gains or cause
industry crashes based on reckless behavior and ordinary people lose billions
of dollars in net worth the Wall Street hotshot get to walk away Scott free.
In my opinion I rather have a guy who purchased options on a tip in making
money versus reckless money managers who lost his senior citizens entire life
savings. The mortgage crisis was completely avoidable and most people agree
that what companies did bordered on the illegal yet no one has been prosecuted
for crime. These high-profile prosecutions by the SEC seemed to be just a bit
of posturing to get the image polished in the news.

Martha Stewart and Mark Cuban for both in the same boat, bad knowledge that
their investment was about to tank in there were about to lose money. What
normal person would sit back and allow their money to go down the drain.
Especially when information is not solicited by you. In both cases it seems
someone came to them with the information they did not actively seek it out.
How could you not act on that tip. I'm not crying for multimillionaires but
it's hard to ignore the fact that any normal Joe blow citizen would do any
differently. this is exactly the case with the factory workers. The chief
mechanical executive was observant of his surroundings and concluded something
was up. He was not involved in the deal, no one came to him and give him
information, he pieced the puzzle together himself. He should not be penalized
for that.

The problem is the vagueness of the law. Laws should not be left open for wide
speculation and interpretation of said law. Especially in finance, it should
be as defined in particular as possible. We definitely should have fair
markets, without it Wall Street would evolve into an even more chaotic and
corrupt place. The people need to know where they stand and what they can and
cannot do.

This type of disparity in the law and its enforcement is not unique to the
financial industry. Drug laws and penalties vary wildly. The Rockefeller drug
laws are some of the most notoriously lopsided legislation that was ever
passed. You could do decades for possession of crack but only a few years of
probation for the equivalent amount of cocaine.

Define the laws, level the playing field and enforce penalties uniformly. It's
really just a simple as that.

On a funny note the guys who used a Croatian seamstress at the front first
tried to hire strippers to solicit tips from bankers while they were partying
at a strip club. Illegal, yes but funny as hell.

