{"title":"The Law and Economics of Insider Trading: A Comprehensive Primer","authors":"Stephen M. Bainbridge","doi":"10.2139/SSRN.261277","DOIUrl":null,"url":null,"abstract":"Insider trading likely is one of the most common forms of securities fraud, yet it remains one of the most controversial aspects of securities regulation among legal (and economic) scholars. This paper provides a comprehensive overview of both the law of insider trading and the contested economic analysis thereof. The paper adopts a historical approach to the doctrinal aspects of insider trading, beginning with turn of the 20th Century state common law, and tracing the prohibition's evolution up to the most recent U.S. Supreme Court decisions under Rule 10b-5. The paper then reviews the debate between those scholars favoring deregulation of insider trading, allowing corporations to set their own insider trading policies by contract, and those who contends that the property right to inside information should be assigned to the corporation without the right of contractual reassignment. The paper also reviews the public choice analysis of insider trading to show that the prohibition benefits market professionals and corporate managers rather than investors.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":null,"pages":null},"PeriodicalIF":2.8000,"publicationDate":"2001-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"35","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Corporate Communications","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/SSRN.261277","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 35
Abstract
Insider trading likely is one of the most common forms of securities fraud, yet it remains one of the most controversial aspects of securities regulation among legal (and economic) scholars. This paper provides a comprehensive overview of both the law of insider trading and the contested economic analysis thereof. The paper adopts a historical approach to the doctrinal aspects of insider trading, beginning with turn of the 20th Century state common law, and tracing the prohibition's evolution up to the most recent U.S. Supreme Court decisions under Rule 10b-5. The paper then reviews the debate between those scholars favoring deregulation of insider trading, allowing corporations to set their own insider trading policies by contract, and those who contends that the property right to inside information should be assigned to the corporation without the right of contractual reassignment. The paper also reviews the public choice analysis of insider trading to show that the prohibition benefits market professionals and corporate managers rather than investors.
期刊介绍：
Corporate Communications: An International Journal addresses the issues arising from the increased awareness that an organisation''s communications are part of the whole organisation, and that the relationship an organisation has with its external public requires careful management. The responsibility for communications is increasingly being seen as part of every employee''s role and not simply the function of the marketing/PR departments. This journal will illustrate why communications are important and how best to implement a strategic communications plan.
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