The fact Senators and Congressmen are even allowed to buy stocks with business before them should be illegal and the SEC should have charged them like Martha Stewart and Raj Rajaratnam, hedge fund manager! Stewart and Rajaratnam where both sent to jail! Of course, they changed the law so that, the public cannot see anything now as Senators and Congressmen do not have to disclose their stock holdings! Very convenient to facilitate insider trading. The reason insider trading is illegal is because it creates an uneven playing field. It allows a select few to essentially, cheat and get away with it!
LOL - "Show me the victims of insider trading."
- Thread starter sle
- Start date
The fact Senators and Congressmen are even allowed to buy stocks with business before them should be illegal and the SEC should have charged them like Martha Stewart and Raj Rajaratnam, hedge fund manager! Stewart and Rajaratnam where both sent to jail! Of course, they changed the law so that, the public cannot see anything now as Senators and Congressmen do not have to disclose their stock holdings! Very convenient to facilitate insider trading. The reason insider trading is illegal is because it creates an uneven playing field. It allows a select few to essentially, cheat and get away with it!
For people to have confidence in the markets and willing to participate, they need to believe it's a fair playing field.
On an "insider play" one party has an unfair edge, and he is acting on that to his behalf. The other party.... he doesn't know about the inside edge and buys/sells assuming no special info available to the other. In a sense, insider trading is "theft" from the unwitting counterparty to the trade. That's why it's not a "victimless crime" and is therefore illegal.
That congress has exempted itself from the insider trading regulations the rest of us must abide by is DESPICABLE!! Basically Congress has legislated itself a LICENSE TO STEAL, and few complain.
Last edited:
I also think that if a company knows its drug trial is going to fail or an huge accounting mistake was discovered, why should the board of directors and all large connected shareholders get to dump their stock based on the insider information and save millions before the news hits while the rest of the public has to get the news after and watch the stock plummet. Same with profits. If you invest in the stock you should be exposed to the same risks as everyone else.
The market is heavily regulated and if it cannot run efficiently and fair then the system breaks down to some extent. Insiders don't deserve any special priviledge for being an insider. I think people underrate the role of fairness in a market/commercial system. It is the same reason we have contract law.
The market is heavily regulated and if it cannot run efficiently and fair then the system breaks down to some extent. Insiders don't deserve any special priviledge for being an insider. I think people underrate the role of fairness in a market/commercial system. It is the same reason we have contract law.
Totally. If the markets are perceived as being rigged, you will see wider spreads, less liquidity, and higher risk premia (lower prices). It's a form of inefficiency that will affect the real economy.
That's why insider trading is illegal. You know "material information" the counterparty to your trade doesn't... which if he knew, would likely not transact at the current market price, securing your advantage.
They don't.
It's why they are restricted-holders. Collins was a restricted holder of those shitty shares. His legal argument is that he didn't sell a single share!
ENE was a fraud compounded by insider selling. Selling by insiders in ENE was a crime, but the massive financial fraud supersedes.
That's my point, the argument against allowing insiders to trade and why it is a crime, i.e. if it was not a crime why should insiders get the advantage. They shouldn't and why it was made illegal. It is not a victimless crime.
I am differentiating between restricted insiders operating legit companies vs. fraud from the top-down. The Aussie company's officers weren't selling, AFAIK. Save for Collins' family. Enron was just a giant cap-mkts Ponzi.
Enron: Ponzi which insiders sold shares when unrestricted.
ImClone: Waksal sold and told Martha about it.
Collins Aussie company: Restricted but told others.
The purpose of restricting board-level/officers to 2-4x per year is to avoid these issues. There are federal-minimum sentencing guidelines for these crimes.
Yeah but I still feel Collins will get the slap on the nuts only..... we will see.