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That is the main argument in favor of insider trading. But why would I ever invest in a company if I knew that my gains would be stolen by people with secret k
by sukilot 6y ago
That is the main argument in favor of insider trading.
But why would I ever invest in a company if I knew that my gains would be stolen by people with secret knowledge?
If you allow insider trading, then you eliminate the incentive for outsider investing
And that means that we don't have public companies, only private companies.
- derefr 6y ago"Eliminating the incentive for outsider trading" is one way to think of it. Another way to think of it is that it creates an incentive for corporate espionage, so that outsiders may gain insider information. In a world where corporate espionage is not itself illegal, the market would then be composed of private companies plus external "auditors" who are slipped in by all interested shareholders whether the private companies like it or not. ...which is oddly similar to governments performing intelligence on allies.