I’ve never quite bought into this crime, probably because I never believed Wall Street was a level playing field. It’s nice to imagine Jimmy Stewart digging deep in his jeans’ pocket to buy two shares of International Harvester on the same information that Mr.Potter had but if that was ever the case, which I doubt, the age has long passed. The day of the individual investor out-smarting Wall Street is over, and our best bet is to buy index funds and track the big boys. Win or lose, we’ll follow their fortunes.
I studied the first insider trading cases while in law school, and wasn’t persuaded by the SEC’s and the Supreme Court’s logic. As the definition of insider trading has been expanded, I find the argument ever-less persuasive. We don’t have a neutral market – not when traders can move into and out of a stock in mere seconds – and we aren’t going to have one again. Day trading at home was always a fool’s game, and it’s more of one now. So is betting against professional traders who all have some sort of “inside” information, some of which is good, some bad, but always, their trades are based on their best hunches and best information. In that way, it’s a level playing field for the institutional traders, but retail customers, who make up an infinitesimal share of trading volume, are just dumb out of luck, as they’ve always been. To pretend otherwise just perpetrates the fraud.