Ever since the news broke this weekend of the huge insider trading investigation now being pursued by the DOJ and the SEC, articles have been flying in the press questioning whether insider trading should even be illegal (see “The Government’s Insane War Against Insider Trading,” “The SEC’s Absurd War Against Insider Trading,” “Insider Trading Should Be Legal,” “Maybe Insider Trading Should Be Legal,” and so on.
There are arguments for legalizing insider trading that revolve around promoting the free flow of information–I get that. There are also arguments against legalizing insider trading that equate insider trading with the theft of information and conclude that it should be punished for the same reasons that we punish other forms of theft of property–I get that, too (and tend to agree).
