It’s one thing for a firm to guard its own secrets, and enforce those rules with internal sanctions. But government regulations on insider trading is criminalizing knowledge as such, insofar as it is not in a press release, an notion which wars against the very idea of entrepreneurship.
Such thoughts arise in connection with the news that 13 top Wall Street traders were arrested for trading on insider knowledge. Even other traders who followed their lead — without actually having been given information — were arrested as well. The news story describes the deals as “scams” but the reality is that not one person was hurt in this business. The profits are so high precisely because the information on which they based their trades is artificially scarce, due to regulations.
For more on the topic, see Machan “The Morality of Insider Trading,“ Rothbard from Making Economic Sense (book here), Mercer on “Communism in Capital Markets,” Anderson on “The Attack on Martha.“, and Padilla on why the government itself is the true source of trouble here.
