deObfuscate

I don't have an argument. You don't need to argue to contribute. My contribution was pointing out persuasive writing devices often used to add credibility to one’s argument but are not supported by any logic or reasoning in his comment.

> But it does, it increases information available to the public.

A little less pedantically for those who enjoy repetition and are prone to dogma, more information is not always better. In this case, as is in general, there should be some qualitative analysis, e.g., the type of information, how it was gathered, its method of distribution,...etc.

On another note, the Efficient Market Hypothesis (EMH) is not reality. I say this because you have used several core tenets in your discourse repeatedly. I acknowledge the high probability that I am most likely dealing with a college student fresh out of introductory Macro. Yes, the class is interesting and exciting. Here is a lesson, EMH is a model used to help us reason about the market. Its an abstraction based on an abundance of simplifying assumptions, ceteris paribus. Anybody who does not disabuse themself of this notion that EMH follows reality is a fine and perfectly capable person who may make a lot of money some day (fingers crossed), but they don't really add much to the conversation.

Finally, unrelated to the aforementioned, yet I don’t care to answer any more of your responses to my posts, so I’ll add this here: look up the ‘straw man fallacy.’ I tend to shy away from using biases and fallacies in general discussion, they seem to miss more than they hit. However, my distaste doesn’t stem from those who use them effectively to facilitate when they hold relevance. No, my distaste comes from those who use them as the argument itself. It is lazy and adds nothing to of value, much like allowing insider trading. If you can explain what makes my example of financial auditors' a 'straw man', especially when it was solicited by a general question asking for examples, then you can claim you 'dominated the conversation' / won or whatever this is.

https://en.wikipedia.org/wiki/Straw_man - here is a link, figure it out.

Economists aren't a monolith.

Legalizing insider trading does nothing for fairness.

The SEC does catch insider trading. And yes, they could do better.

Your morals are showing. Just because you can justify it doesn't make it so for most.

Good enforcement isnt impossible. Improbable, yes.

Every trade has to be disclosed. There isn't a block-chain involved, but their is an e-paper trail. We are on a technology forum in a time where ten people could probably put together a domain model that tracks potential conflicts based on peoples trades, google contacts, and linkedin profile. And any person who traded on insider information in the past probably leaves a pattern.

Personally, I think the argument is interesting. Let us split it into technical and cultural concerns.

A market changes according to flow and distribution of public and private information. The more publoc information, the more accurately priced the stock. Insider information increases public information indirectly through trading said stock.

From a cultural standpoint, many people do not trade on insider information because it is seen as unfair or immoral. A number of people abstain because it is illegal. Some do trade based on self interest and the disproprotiate personal gains to risk involved.

Nowhere, in any of this is the quality and manner of disclosure. Ultimately, it just creates another financial game where people race to see who can get the information quickest.

Needless to say, the systems of reporting in corporations would adjust and the largest share of gains would be made by those who have large holdings of stock. At the same time, it takes away a measure of enforcement and adds traders who were deterred by laws and morals.

Their obviously wasn't much thought put in to this. Anywhere that a conflict of interest occurs has potential for abuse. If the officer/employee/agent has the ability to influence the result and profit then their is a conflict of interest. The legal ramifications are lessened and the cost to benefit subsequently decreases.

Auditors are a good example. They have privileged information and are responsible for the fairness of financial information / disclosure. Their incentives are already complicated by the compensation structure, i.e. the company they attest for pays their fee and ultimately decides whether they will work together in the future.

In this instance, an abolishment to insider trading regulation would ultimately undermine trust in the financial reporting system. The auditors could potentially place bets on their engagements and negotiate results based on their interests. Impartiality would be compromised. There are safeguards in place currently, penalties for insider trading are part of the remedy.

So, if I were a trader at Enron who made good money trading electricity and gas then used that money to short the stock based on private information, I'd be doing everyone a service and fighting for fairness. Better yet, I could be one of their auditors at Arthur Andersen.