EconPapers    
Economics at your fingertips  
 

Regulating information flows: Is it just? Insider trading and mandatory-disclosure rules from a free-market perspective

Enrico Colombatto () and Valerio Tavormina
Additional contact information
Enrico Colombatto: Università di Torino
Valerio Tavormina: Università Cattolica del Sacro Cuore

European Journal of Law and Economics, 2018, vol. 46, issue 2, No 4, 205-221

Abstract: Abstract Much of Henry Manne’s work on insider trading emphasised that this practice enhances quick dissemination of information and ultimately efficiency. In this paper, we draw attention to the fact that regulating insider trading encroaches upon the foundations of a free-market economy, and boils down to a question of envy, rather than justice. In particular, there is nothing undesirable, fraudulent or shameful in a process through which selected agents (the insiders) transform dispersed information into specialised knowledge, and make use of it. One may be envious that insiders make a profit or avoid a loss thanks to their privileged position. Yet, insiders do not steal any information and do not violate any property right. Their only constraint is an explicit contractual agreement with their employer. In that case, the government might be required to enforce the contract. Regulation would be illegitimate.

Keywords: Insider trading; Information; Justice; Property rights (search for similar items in EconPapers)
JEL-codes: G18 G28 K22 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10657-018-9586-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ejlwec:v:46:y:2018:i:2:d:10.1007_s10657-018-9586-7

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10657

DOI: 10.1007/s10657-018-9586-7

Access Statistics for this article

European Journal of Law and Economics is currently edited by Jürgen Georg Backhaus, Giovanni B. Ramello and Alain Marciano

More articles in European Journal of Law and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-19
Handle: RePEc:kap:ejlwec:v:46:y:2018:i:2:d:10.1007_s10657-018-9586-7