By Al Lewis
Imagine a world where insider trading is legal.
As chief executive, you could short your own stock just before reporting your disappointing numbers to Wall Street.
As investor relations or PR counsel, you could trade ahead of any news you may hear in advance as a routine part of your job. So could accountants, attorneys, auditors, consultants and employees — all the way down to the janitor digging through the office recycle bins.
Hedge funds could deploy armies to sidle up to corporate insiders — buy them dinners, take them on fabulous trips, shower them with gifts — just for information.
Stockbrokers and financial planners would never have to worry about going to prison after hearing a hot tip at a cocktail party.
The rules would be well-understood: Whoever gets the best information wins.
“I want the laws completely erased,” said John Tamny, editor of Forbes Opinions and RealClearMarket in an email exchange.
“Let the markets sort out the information that’s out there.”
He argues insider trading is vaguely defined, and to criminalize it merely blocks the flow of information markets need to thrive. He is hardly alone.
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