Insider Trading and the Social Contract

Business Ethics Quarterly 5 (2):313-328 (1995)
Abstract
The law of insider trading has progressed from an expansive approach, according to which all trading on nonpublic information was considered illegal, to a constricted approach, under which corporate outsiders are permitted to trade on nonpublic information provided such trading does not breach a fiduciary duty. This article analyzes both the former, expansive theory and the currently utilized constricted theory, within a framework of basic tenets of the American capitalist social contract regarding legitimacy of property claims. The existing constricted approach to the regulation of insider trading is found to be deficient in meeting the expectations of two core components of the social contract: it discourages procedural equality of opportunity, and it endorses claims to property that are not characterized by legitimate methods of acquisition or transfer. Because the old, expansive regulatory interpretation was more consistent with the terms of the social contract in regard to property claims, it served our economic and ethical expectations more effectively than the system presently in place. Accordingly, the article culminates in a recommendation that the expansive approach to regulating insider trading be reestablished under Unites States law
Keywords No keywords specified (fix it)
Categories (categorize this paper)
Options
 Save to my reading list
Follow the author(s)
My bibliography
Export citation
Find it on Scholar
Edit this record
Mark as duplicate
Revision history Request removal from index
 
Download options
PhilPapers Archive


Upload a copy of this paper     Check publisher's policy on self-archival     Papers currently archived: 9,357
External links
  • Through your library Configure
    References found in this work BETA

    No references found.

    Citations of this work BETA

    No citations found.

    Similar books and articles
    Richard L. Lippke (1993). Justice and Insider Trading. Journal of Applied Philosophy 10 (2):215-226.
    Robert W. McGee (2008). Applying Ethics to Insider Trading. Journal of Business Ethics 77 (2):205 - 217.
    Patricia H. Werhane (1989). The Ethics of Insider Trading. Journal of Business Ethics 8 (11):841 - 845.
    Patricia H. Werhane (1991). The Indefensibility of Insider Trading. Journal of Business Ethics 10 (9):729 - 731.
    Analytics

    Monthly downloads

    Added to index

    2011-01-09

    Total downloads

    3 ( #223,982 of 1,088,616 )

    Recent downloads (6 months)

    1 ( #69,601 of 1,088,616 )

    How can I increase my downloads?

    My notes
    Sign in to use this feature


    Discussion
    Start a new thread
    Order:
    There  are no threads in this forum
    Nothing in this forum yet.