Insider Trading Is a Contentious Thesis

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Further complicating the issue is that the definition of insider trading differs from one jurisdiction to the next. Given the increasing globalization of business, it seems unreasonable that we can continue to exist in a world with a poorly-defined and highly variable definition of insider trading.

The everyday investor, certainly, cannot invest with any confidence under the present circumstance. Efficient market theory demands that information be perfect, but it is difficult to guarantee that given the vast number of stocks trading on our stock exchanges today.

Whatever the solution, it should be tailored with specific objectives in mind. These objectives should take into consideration what stock markets should be. The original intent was to provide a means for companies to raise capital, and that is still a critical function today. However, they are also the places where people, everyday citizens, have their life savings stored.
That makes stock markets a critical component in the nation's economy.

The ramifications of a mass loss of confidence in capital markets is significant. Thus, the prime objective of insider trading regulations should be to maintain the integrity of the markets, and consumers' confidence in them. Efficient market theory demands that all investors have equal information, not just those with insider status. If actions such as Chiarella's are allowed in our capital markets, investors will lose confidence. They will take their money out of our stock markets. It is imperative, therefore, that the laws and regulations surrounding insider trading be given all the strength possible, and ideally that the SEC solidify the definition to provide for better clarity for all market participants, not just those with intimate knowledge of insider trading….....

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"Insider Trading Is A Contentious", 05 March 2009, Accessed.4 July. 2025,
https://www.aceyourpaper.com/essays/insider-trading-contentious-24241