4 ms·

I'm not so convinced: 1) "didn't hurt anyone": Sokol learned about Lubrizol while on his duties at Berkshire. After all, that's what Berkshire pays him for, to

I'm not so convinced: 1) "didn't hurt anyone": Sokol learned about Lubrizol while on his duties at Berkshire. After all, that's what Berkshire pays him for, to research interesting investment opportunities. By buying before Berkshire, he front-runned the firm using Berkshire's private information (aka, what he knew as #2 in the firm). 2) "trading laws should be abolished... insider trading helps.. individual investors" There are some academics that think so, but the academic consensus is in the other way. For instance, several studies have shown that on the days were insider trading is less likely to ocurr, bid-ask spreads are lower.

Yzupnick 16y ago
Do you mind linking to these studies? I am genuinely interested in reading them.
- zzleeper 16y ago
  Sure: The bid-ask spread paper: "the black period is associated with a bid-ask spread narrower by about 2 bps" http://scholar.google.com/scholar?q=related:bZ0CEWMhg4YJ:scholar.google.com/&hl=en&as_sdt=0,34 http://scholar.google.com/scholar?q=related:bZ0CEWMhg4YJ:sch... http://www.cib.espol.edu.ec/Digipath/D_Papers/38570.pdf http://www.cib.espol.edu.ec/Digipath/D_Papers/38570.pdf Another well cited but controversial paper: http://foba.lakeheadu.ca/gradojevic/5079/meulbroek(1992)_insider.pdf http://foba.lakeheadu.ca/gradojevic/5079/meulbroek(1992)_ins... http://scholar.google.com/scholar?cites=3127308622037385070&as_sdt=5,34&sciodt=0,34&hl=en http://scholar.google.com/scholar?cites=3127308622037385070&... From those two, you can build your way up to the more current papers using the "Cited by" feature. For more quality, focus on papers written on the more known journals (eg: journal of finance, journal of financial economcs, RFS, and so on). Also, see the 1997 SCOTUS ruling on insider trading: http://en.wikipedia.org/wiki/Insider_trading#Court_decisions http://en.wikipedia.org/wiki/Insider_trading#Court_decisions http://www.law.cornell.edu/supct/html/96-842.ZO.html http://www.law.cornell.edu/supct/html/96-842.ZO.html IANAL, but their "misappropiation" argument can arguably apply in this case. Cheers

Yzupnick 16y ago

Do you mind linking to these studies? I am genuinely interested in reading them.

zzleeper 16y ago
Sure: The bid-ask spread paper: "the black period is associated with a bid-ask spread narrower by about 2 bps" http://scholar.google.com/scholar?q=related:bZ0CEWMhg4YJ:scholar.google.com/&hl=en&as_sdt=0,34 http://scholar.google.com/scholar?q=related:bZ0CEWMhg4YJ:sch... http://www.cib.espol.edu.ec/Digipath/D_Papers/38570.pdf http://www.cib.espol.edu.ec/Digipath/D_Papers/38570.pdf Another well cited but controversial paper: http://foba.lakeheadu.ca/gradojevic/5079/meulbroek(1992)_insider.pdf http://foba.lakeheadu.ca/gradojevic/5079/meulbroek(1992)_ins... http://scholar.google.com/scholar?cites=3127308622037385070&as_sdt=5,34&sciodt=0,34&hl=en http://scholar.google.com/scholar?cites=3127308622037385070&... From those two, you can build your way up to the more current papers using the "Cited by" feature. For more quality, focus on papers written on the more known journals (eg: journal of finance, journal of financial economcs, RFS, and so on). Also, see the 1997 SCOTUS ruling on insider trading: http://en.wikipedia.org/wiki/Insider_trading#Court_decisions http://en.wikipedia.org/wiki/Insider_trading#Court_decisions http://www.law.cornell.edu/supct/html/96-842.ZO.html http://www.law.cornell.edu/supct/html/96-842.ZO.html IANAL, but their "misappropiation" argument can arguably apply in this case. Cheers