Public markets are intentionally set up to "benefits some parties that aren't really invested into the company" -- e.g. your retirement savings and your grandma's. That's a feature. Not a bug. Indeed, the main point of regulated public markets (as opposed to private ones) is to insulate your grandma's retirement funds from shenanigans like this, because before that, people would lose life savings to scammers.

If you want to allow shenanigans and / or only people with a vested interest, stay private and buy / sell only to savvy investors. That's allowed too.

Insider trading means insiders can and will:

1) Buy stock and launch (dishonest) positive press releases

2) Sell stock thereafter and launch (dishonest) negative press releases

Loop, rinse, and repeat. That happened, and if permitted, that would happen again. Much worse things happened too.

Your grandma can't do due diligence on every stock in her index fund. A savvy investor making targeted investments can.