INSIDER TRADING: THE CASE AGAINST THE "VICTIMLESS CRIME" HYPOTHESIS |
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| Authors: | Norman S Douglas |
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| Institution: | University of Bridgeport, Bridgeport, CT 06601. The author acknowledges the valuable comments of Steven Bolten, Peter Costello, and Jerzy Thieme. A special note of thanks is due Sue Atkinson and Robert Bard. |
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| Abstract: | This paper challenges the long held hypothesis that insider trading is a victimless crime. Using utility maximization analysis, the author examines both the good news and bad news cases. Injury is demonstrated. Separability of the insider's trade from the insider's information monopoly is also examined utilizing the generally accepted market structure analysis. Separability is rejected. |
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