That last "if" is the crux. Intent is a huge factor in what is and is not considered legal market behavior. For example, consider banging the close. Buying lots of futures at a certain time of day is not illegal in and of itself. But it's quite illegal if regulators show that your purpose in doing so was to influence the settlement price of some other asset in which you hold a position.

Wouldn't banging the close be priced into the market?

Can you leverage buying a lot of calls or puts into making profit for yourself?

How are they going to prove intent?

It tends to involve things like subpoenas and depositions.

Trading on inside information shouldn't be illegal either, it actually benefits even market participants who don’t have access to it.

> it actually benefits even market participants who don’t have access to it

How?

Insider trading drives prices closer to fair value. A CEO dumping shares before reporting a bad quarter saved money for unknowing purchasers buying the stock. If the CEO buys shares before reporting a huge new government contract, they get a better price for clueless sellers.

Now public companies could still restrict CEOs and other employees from profiting from insider knowledge. It could even be as simple as requiring employees to file disclosure filings before any stock transaction to level thevplayomg field.

I think he means that in technical analysis, they trade based on price action. Thus, insider trading gives you a peek into something that the fundamentals haven’t revealed yet (the price will change to reflect the secret news).