Subject:
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Insider Trading (Was: Re: Lego Direct (was Re: Georgia LEGO Outlet is Cool!))
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Tue, 28 Mar 2000 00:34:16 GMT
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In lugnet.dear-lego, Jeff Johnston writes:
> The reason that "insider trading" is illegal in the stock market is to prevent
> people from unfairly manipulating stock prices. Imagine this:
>
> CEO Guy: OK, Bob, here's the plan. Our stock is low, you buy a whole bunch of
> it. We'll make a false leak about a new breakthrough and the price will rise.
> You'll sell the stock and we'll split the proceeds before anyone realizes that
> the "breakthrough" never happened.
I admittedly know very little about stock market stuff, so this is mean in the
spirit of innocence - my flame proof suit is at the dry-cleaners..
I've just become curious about this "insider trading" law thingy - has the
market ever operated without it? Is it a stabilising measure designed to stop
exploitation? (Seems a weird measure for a capitalistic institution!)
What would the market be like without this law? And does the LP plan on
abolishing it along with a lot of other laws?
In our information age, would established corperations might play "CEO and Bob"
games, precisely because if they did so - who would trust them enough to invest
in them again? I'm not trying to troll with the LP references - it just seems
to me that the LP is all about using knowledge and information and freedom as
stabilising factors, as opposed to laws which can have a tendancy to cause
ripple-unstability.
Is it possible that the stock market would be more 'fair' and equal without it?
Those with true insider information would benefit - great says I, it makes
information more important than vast sums of capital which can survive the odd
risk or so.
If allowing insider trading would mean that rumours like "Microsoft are going
to buy this small computer company", could be trusted even less.. then whenever
the rumour becomes official.. every "outsider" has an equal chance to get their
slice of the pie? And those who took the risk can benefit the most?
Maybe I just need some more examples, but I'm not convinced that disallowing
"insider trading" doesn't just help keep the big guys big, and the small guys
small. Which of course would be as good as any reason for its existance!
Richard
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Message has 1 Reply:
Message is in Reply To:
 | | Re: Lego Direct (was Re: Georgia LEGO Outlet is Cool!)
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| (...) Larry gets "preorders" and you don't. Why? Because you don't spend Big Bucks. Same difference. (...) This has nothing to do with buying LEGO, or anything else except stocks. Larry isn't getting "insider information", he's getting a chance to (...) (25 years ago, 28-Mar-00, to lugnet.dear-lego) !
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