RegulatorCountry is on to something.
Consider this scenerio. You are the vice-president of development of a large corporation. And it’s decision time. You have to decide if a new product is ready for market. In your opinion, the product is not ready.
Your duty is to report that more time is needed before releasing the product.
Now suppose that there were no insider trading laws. If you were less than ethical, you could buy up a ton of your company shares, then report the product as ready for market.
When the product comes out, the stock price rises, and you sell.
Now, who gets hurt by this insider trading? Everyone, except the insider trader. When the product fails, the company suffers. The long-time shareholders suffer. And folks who bought stock on the strength of the new product suffer.
There are many variations on this scenerio, with pretty much the same result.
I’m onto something that was common knowledge and self-policing in the corporate world just a few short decades ago. It’s in their interest to do so.
The rise of the mercenary CEO combined with the invasion of the Wharton MBA, combined with the seemingly bottomless capital inflows from mutual funds have completely distorted the system, allowing and even appearing to encourage a lot of dirty dealing. It continued so long as the overall trend was upward. It’s not anymore, and the dirt’s about to be swept out from under the rug.
People have been too trusting, and if there’s ever a situation where trust alone is insufficient, it’s wherever there are large sums of money and decisions to be made as to the disposition of it, whether that’s a will, a church, a business, bank or brokerage.
People are going to be absolutely furious if the plain truth is ever laid bare.