economist9374

> From a cultural standpoint, many people do not trade on insider information because it is seen as unfair or immoral

Is it immoral to trade on material nonpublic information you happened to overhear in a restaurant?

So, you don’t actually have an argument to make?

> Legalizing insider trading does nothing for fairness

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

This is not at all in line with research on the field.

> It's why inside traders are usually unsophisticated

Insider traders who get caught are usually unsophisticated.

> The auditors could potentially place bets on their engagements and negotiate results based on their interests. Impartiality would be compromised

This is a very odd straw man.

What you are describing would still be a crime in a world in which insider trading is legal.

I think you are the one who didn’t put much thought into this.

>(Hint: the SEC does this.)

Does it work? (Hint: no)

> It's much easier to check for insider information after the fact than it is to profitably trade on it.

This is only true for the least sophisticated insider traders.

> If insider trading is legal, fewer people will participate in the market because they will lose out due to information asymmetry and this will lead to pricing inefficiencies.

This only makes sense in a world where regulators can effectively prevent insider trading, that’s not the world we live in though.