Comment by idiotsecant
17 hours ago
That's a spicy meatball. And also very stupid, but I admire the lack of foresight it takes to advocate for insider trading. What's your next hot take? Can i suggest 'Epstein did nothing wrong'?
17 hours ago
That's a spicy meatball. And also very stupid, but I admire the lack of foresight it takes to advocate for insider trading. What's your next hot take? Can i suggest 'Epstein did nothing wrong'?
the OP isn't wrong about insider trading - it's just that it lacked the crucial bit about being _transparent_ about insider trading.
Current insider trading laws are about _preventing_ it (but it still happens). This makes it so that insiders who do trade and get away with it make bank, but this does little to benefit the over all market information equilibrium.
What needs to make insider trading "good" (instead of bad), is to make the insider's trades 100% transparent and instant (instead of the months of SEC filing currently needed before it becomes public info). Doing this will ensure that insider's trades immediately gets reflected and copied/arbitraged against, and will allow the price of a stock to reflect information not yet released but is acted upon by insiders.
See also https://en.wikipedia.org/wiki/Insider_trading#Arguments_for_...
Insider trading is already perfectly legal (by US law), if you do it with consent of your company. So the rules are not about protecting the public at all.
In any case, I'm not making some innovative new argument or hot take. This is pretty standard, orthodox academic stuff. See eg https://en.wikipedia.org/wiki/Insider_trading#Arguments_for_...
What's an Epstein? Is that some other company you don't like?
That isn’t true at all. You need to take your insider trading again (every bigcorp makes you do it) and learn what insider trading actually is, and why it is illegal, and why you’ll probably get caught. I’ve heard too many sad stories where immigrants from a country with looser laws came to the USA for very high paying tech jobs, and throw them away for just $100k of insider trading gains.
The company is allowed to trade on their insider information. That's perfectly normal and legal.
When Warren Buffett decides that he wants to buy stock in a company, he knows that if this became public, the target company's stock would go up. Nevertheless, he's allowed to trade on this insider information (about himself!) without informing the general public first.
> You need to take your insider trading again (every bigcorp makes you do it) and learn what insider trading actually is, and why it is illegal, and why you’ll probably get caught. I’ve heard too many sad stories where immigrants from a country with looser laws came to the USA for very high paying tech jobs, and throw them away for just $100k of insider trading gains.
That's true but also entirely irrelevant to my point: in these cases the company does not consent to the employee using the information. And, yes, that's illegal.
Insider trading law in the US is about breaching fiduciary duty. If the company consents, there's no fiduciary duty that was broken. (But the conditions are more complicated. So let's go with the simpler example of a company trading on its own secret, insider information.
It's a fun little legal Gedankenexperiment to craft the conditions that make what would otherwise be insider trading legal in the US. But as you suggest, it's not very relevant in practice, because they all require the company's consent, which you normally don't get. Matt Levine sometimes likes to write about these sorts of things in his 'Money Stuff' newsletter.)
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Epstein is good for the economy because it ensures politicians get goods before they would be considered market ready allowing for policy to be created proactively. /s