Document Type
Article
Abstract
The government's recent crackdown on insider trading has revived an old debate about the wisdom of insider trading prohibitions. Opponents of insider trading laws often argue that insider trading contributes to market efficiency because it brings information to the market which gets incorporated into the price of the security, leading to more accurate pricing in a more timely fashion. Although this argument is intuitively appealing and has some empirical support, a look at some recent cases of known insider trading reveals situations where the market fails to detect the presence of informed traders, and even instances where the stock price moves in the contrary direction. This indicates that insider. trading does not always bring information to the market, which undermines what is perhaps the most cogent argument for ending insider trading prohibitions.
Publication Date
11-1-2018
Recommended Citation
, 44 J. Corp. L. 65 (2018-2019).
Department
College of Law
ISSN
0360-795X
Language
eng
Suggested Citation
, 44 J. Corp. L. 65 (2018-2019).
