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One thing I rarely hear people talk about is how many libertarians believe insider trading shouldn't be a crime. There are lots of libertarians in the financial

One thing I rarely hear people talk about is how many libertarians believe insider trading shouldn't be a crime. There are lots of libertarians in the financial industry, so there are likely lots of people in the financial industry who believe that laws against insider trading are evil. So when I picture insider traders, I don't picture shady organized criminals doing things they know are bad. I picture cowbows believing themselves to be the good guys for freedomizing the market. And when you think about all the people who believe that insider trading is a positive good, you kind of have to conclude that it's rampant. It's financially lucrative, hard to detect, harder to prove, relatively easy to hide, relatively easy to pin on someone below you in the org, and people think they're good for doing it. What force is keeping it in check?

TacticalCoder 2y ago
[flagged]
- ants_everywhere 2y ago
  I'm sorry I hurt your feelings. > there are hardly any libertarians There are tons of libertarians in the US. If you're in Luxembourg (judging from your profile?) you may have fewer of them. There was a big push in the 70s. Most of the ones I've known well grew up in the 70s and read more or less the same literature. The had some influence in econ in the 70s and 80s and their influence is less mainstream now, so you may have fewer younger ones. There are still lots of them in tech, especially in the bay area. Perhaps they still skew older, I don't know much about the demographics these days. It's partially an American phenomenon because of the cold war and because it became a way for conservatives to --racism and ++drugs. Nowadays you don't need a third party for that. > May I have some of what you're smoking? - https://www.cato.org/commentary/its-time-legalize-insider-trading https://www.cato.org/commentary/its-time-legalize-insider-tr... - https://mises.org/articles-interest/what-morally-right-insider-trading https://mises.org/articles-interest/what-morally-right-insid... - https://www.investopedia.com/articles/markets-economy/092216/why-insider-trading-bad-financial-markets.asp https://www.investopedia.com/articles/markets-economy/092216... - https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_insider_trading_should_be_legal/ https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_in... - https://politics.stackexchange.com/a/20426 https://politics.stackexchange.com/a/20426 - https://www.pbs.org/wgbh/frontline/article/should-insider-trading-be-legal/ https://www.pbs.org/wgbh/frontline/article/should-insider-tr... Plus many more. Google around for "insider trading" plus some of the standard libertarian economics keywords like "coasian" or "austrian" and you can find some of the literature. I haven't tried smoking any of it, though, and can't advise it.
- Dylan16807 2y ago
  > It's, sadly I'd say, a totally insignificant chunk of the population and yet at every opportunity there shall be people like yourself using any excuse to accuse them of wrongthinking. I don't understand where you're going with this paragraph. Whether they are wrong is unrelated to how many there are. And you don't need very many people to make insider trading happen. And why are you using the term "wrongthink"? This is a discussion about actions and rules. Nobody's being punished for their thoughts and opinions, just called wrong in an internet comment. If I say people shouldn't like hot dogs I'm not accusing Chicago of wrongthink.
- saagarjha 2y ago
  Despite there being so few somehow they are all exceptionally easy to spot…
toss1 2y ago
Different POV: Insider trading should be legal because is fundamentally impossible to police fairly or effectively. The one caveat is ALL trades must be public in real-time (and not via shell corps, but showing the real beneficial owner). This way, insider trading can do public good by providing good market signals. Transparency would also reduce the advantages of insider trading.
- ants_everywhere 2y ago
  Someone can correct me if I'm wrong (which I probably am), but my understanding is that legally the harm of insider trading is to the shareholders not to the fairness of the market. So if I have insider knowledge of some earnings at BigCo and I trade on that, I've breached my fiduciary duty and in some sense stolen that info from BigCo. I don't see how your scheme would address that. Or, less abstractly, if you're preparing the earnings announcement for BigCo and you trade knowing earnings are bad, then you've leaked the announcement. And that gets worse, not better, if all trades are public and real time. So I think total transparency in trading and insider trading interact in non-obvious ways.
  - chii 2y ago
    > harm of insider trading is to the shareholders not to the fairness of the market. no, insider trading doesn't harm the shareholders, except the ones who sold (or bought) without using said information (compared to someone who did have it). The harm is indeed to the market - information assymetry means the other market participants, like the above shareholder, is not buying/selling as "correctly" as the ones doing insider trading. This also leads to mis-pricing - something that decreases market efficiency. But being so difficult to enforce, insider trading can't be fixed tbh. The best we can do, imho, is to make the signal go faster (which is what transparency aims to do). By making the signal go faster, insiders actually have very little time to actually "inside trade". > leaked the announcement the market _should_ know the earnings are bad. In fact, the market _should_ be making a prediction about the earnings in the aggregate. The information from an insider trader, if it were fully transparent, means that a company's shares will accurately reflect their earnings even if they didnt annouce it, and this makes the market more efficient.

TacticalCoder 2y ago

[flagged]

ants_everywhere 2y ago
I'm sorry I hurt your feelings. > there are hardly any libertarians There are tons of libertarians in the US. If you're in Luxembourg (judging from your profile?) you may have fewer of them. There was a big push in the 70s. Most of the ones I've known well grew up in the 70s and read more or less the same literature. The had some influence in econ in the 70s and 80s and their influence is less mainstream now, so you may have fewer younger ones. There are still lots of them in tech, especially in the bay area. Perhaps they still skew older, I don't know much about the demographics these days. It's partially an American phenomenon because of the cold war and because it became a way for conservatives to --racism and ++drugs. Nowadays you don't need a third party for that. > May I have some of what you're smoking? - https://www.cato.org/commentary/its-time-legalize-insider-trading https://www.cato.org/commentary/its-time-legalize-insider-tr... - https://mises.org/articles-interest/what-morally-right-insider-trading https://mises.org/articles-interest/what-morally-right-insid... - https://www.investopedia.com/articles/markets-economy/092216/why-insider-trading-bad-financial-markets.asp https://www.investopedia.com/articles/markets-economy/092216... - https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_insider_trading_should_be_legal/ https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_in... - https://politics.stackexchange.com/a/20426 https://politics.stackexchange.com/a/20426 - https://www.pbs.org/wgbh/frontline/article/should-insider-trading-be-legal/ https://www.pbs.org/wgbh/frontline/article/should-insider-tr... Plus many more. Google around for "insider trading" plus some of the standard libertarian economics keywords like "coasian" or "austrian" and you can find some of the literature. I haven't tried smoking any of it, though, and can't advise it.
Dylan16807 2y ago
> It's, sadly I'd say, a totally insignificant chunk of the population and yet at every opportunity there shall be people like yourself using any excuse to accuse them of wrongthinking. I don't understand where you're going with this paragraph. Whether they are wrong is unrelated to how many there are. And you don't need very many people to make insider trading happen. And why are you using the term "wrongthink"? This is a discussion about actions and rules. Nobody's being punished for their thoughts and opinions, just called wrong in an internet comment. If I say people shouldn't like hot dogs I'm not accusing Chicago of wrongthink.
saagarjha 2y ago
Despite there being so few somehow they are all exceptionally easy to spot…

toss1 2y ago

Different POV: Insider trading should be legal because is fundamentally impossible to police fairly or effectively. The one caveat is ALL trades must be public in real-time (and not via shell corps, but showing the real beneficial owner). This way, insider trading can do public good by providing good market signals. Transparency would also reduce the advantages of insider trading.

ants_everywhere 2y ago
Someone can correct me if I'm wrong (which I probably am), but my understanding is that legally the harm of insider trading is to the shareholders not to the fairness of the market. So if I have insider knowledge of some earnings at BigCo and I trade on that, I've breached my fiduciary duty and in some sense stolen that info from BigCo. I don't see how your scheme would address that. Or, less abstractly, if you're preparing the earnings announcement for BigCo and you trade knowing earnings are bad, then you've leaked the announcement. And that gets worse, not better, if all trades are public and real time. So I think total transparency in trading and insider trading interact in non-obvious ways.
- chii 2y ago
  > harm of insider trading is to the shareholders not to the fairness of the market. no, insider trading doesn't harm the shareholders, except the ones who sold (or bought) without using said information (compared to someone who did have it). The harm is indeed to the market - information assymetry means the other market participants, like the above shareholder, is not buying/selling as "correctly" as the ones doing insider trading. This also leads to mis-pricing - something that decreases market efficiency. But being so difficult to enforce, insider trading can't be fixed tbh. The best we can do, imho, is to make the signal go faster (which is what transparency aims to do). By making the signal go faster, insiders actually have very little time to actually "inside trade". > leaked the announcement the market _should_ know the earnings are bad. In fact, the market _should_ be making a prediction about the earnings in the aggregate. The information from an insider trader, if it were fully transparent, means that a company's shares will accurately reflect their earnings even if they didnt annouce it, and this makes the market more efficient.