| | Thanks Robert you have made me realize my misconception about insider trading. It's not needed as market rule after all. I found the following:
"In practice, prosecutions for insider trading tend to be rare and difficult to win for a variety of reasons. It can be difficult to prove what the accused actually knew at the time the trades were made -- and people may not even be told directly but merely advised to buy or sell with a nudge and wink. Proving that a particular individual was responsible for a trade can also be difficult, because a clever trader can hide behind a variety of nominees, companies, and proxies, some of which may be located offshore in jurisdictions that don't cooperate with the local authorities.
Advocates of legalizing insider trading assert that insider trading is a victimless act, pointing out that a stock will eventually move when the non-public information is released regardless. It is claimed that insider trading laws are not aimed at protecting the general public from a crime perpetrated against them but rather serve to relieve what some believe to be a matter of "unfairness" if someone profits by having more information than them. Advocates will claim that making money by having superior information is what the stock market is "all about" and that allowing trading by anyone based on any information they have available will increase the efficiency of the stock market."
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