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Impractical, maybe, but not pointless. As someone else mentioned, insider trading creates perverse incentives for acting on undisclosed information, however, al
by pilsetnieks 12y ago
Impractical, maybe, but not pointless. As someone else mentioned, insider trading creates perverse incentives for acting on undisclosed information, however, also some of those insiders have a possibility to directly influence those events, which make the perverse incentives even more perverse. Imagine a greedy CEO intentionally causing massive screwups and shorting his company's stocks, for example. At least afterwards it's much easier to prove insider trading than breach of fiduciary trust (also, the former is criminal, and the latter is civil.)
- ghayes 12y agoThis is the primary concern of insider trading, and why insider trading laws don't exist for commodities markets (which are much less susceptible to willful manipulation).
- avn2109 12y agoReally? I have been under the assumption for many years the the commodities markets are thoroughly rigged. See for example (among many others) the Goldman aluminum warehousing case [0-1]. [0] http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html?pagewanted=all http://www.nytimes.com/2013/07/21/business/a-shuffle-of-alum... [1] http://money.cnn.com/2014/11/20/investing/goldman-commodity-manipulation-wall-street/ http://money.cnn.com/2014/11/20/investing/goldman-commodity-... etc...
- darkr 12y agoAs have I, ever since watching the insightful documentary 'Trading Places'.