For the insiders to buy anything, someone else has to sell it. The poor schmuck that didn't have that inside information sure as hell lost a bunch by selling at the lower price.
Ditto for the CEO that sells his just before he the stock will crash, because he knows in advance that it will.
“For the insiders to buy anything, someone else has to sell it. The poor schmuck that didn’t have that inside information sure as hell lost a bunch by selling at the lower price.”
But I’m trying to understand the moral problem. He didn’t have the information but the information is real, not false.
Imagine someone sold a piece of wood for $1. He doesn’t know what to do with it but you have a pretty good idea that you won’t share with anyone else. You decide to build something worth $1,000,000 out of that piece of wood. You have an information advantage that the other guy didn’t have. Isn’t that the same as insider trading?