(1) is the best [i think] unbiased analysis I've seen on the subject that tries to look at it from many points of view. It seems very complicated, and I don't

(1) is the best [i think] unbiased analysis I've seen on the subject that tries to look at it from many points of view. It seems very complicated, and I don't really understand. But it seems like in either cases (legal or illegal) the people who benefits and those who suffers is going to change in every case. For the average investor, in some cases having more efficient stock prices would be a benefit, in other cases, the added information asymmetry would be a unfair. Three points: 1 - Companies could still ban insider trading if that proved more efficient for them. If liquidity was low because insider trading was allowed, they could disallow it. The reverse is also true. So at least companies would have the choice (and investors would also have the choice of where to invest). 2 - While an insider could equally benefit from good and bad news, they are still incentivized towards positive results (salary, bonuses, keeping their job, reputation) 3 - My real problem with making insider trading illegal is that it's completely impossible to enforce consistently and fairly. This adds uncertainty (how much insider trading is going on in your current investments?) I think insider trading only applies to buying/selling, but what if someone has insider knowledge that causes them to NOT take an action. That seems as unfair but can't be enforced.. (1) https://www.frbatlanta.org/-/media/documents/research/publications/economic-review/1997/vol82no4_hu-noe.pdf https://www.frbatlanta.org/-/media/documents/research/public...