It's insider trading because the information that motivates it isn't public. It's like selling someone a work animal that you (but not they) know has a fatal d

It's insider trading because the information that motivates it isn't public. It's like selling someone a work animal that you (but not they) know has a fatal disease. It's not literally fraud, but it smells the same. I think of the market as a medium for transmitting and storing information about how much people value things. It has incredible bandwidth and storage capacity, but its latency is not always the best. Anyone proposing a replacement for a market (in anything!) needs to have respect for the incredible volume of information they're seeking to replace, but the market is not the best tool for everything. I think this is one of those degenerate cases where the latency kills you. Specifically, the time it takes to go from "some people know this company is in trouble" to "everyone knows it" is way too long when the market is the medium of transmission. Lots of people can be ruined in the mean time.