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Where Should the Line Be Drawn on Insider Trading Ethics?

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Abstract

Finance ethics have drawn increasing attention from both government regulators and academic researchers. This paper addresses the issue of insider trading ethics. Previous studies on insider trading ethics have failed to provide convincing arguments and consistent results. In particular, the arguments against insider trading are based primarily on moral and philosophical grounds and lack empirical rigor. This study intends to establish and examine the relationship between the ethical issue and economic issue of insider trading. We argue that the ethics of insider trading is in essence an economic rather than a moral issue. It is so far not clear to what extent insider trading may increase or decrease shareholders wealth. Until then, we must take care to avoid over-regulating insider trading.

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Authors
  1. Yulong Ma
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  2. Huey-Lian Sun
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Ma, Y., Sun, HL. Where Should the Line Be Drawn on Insider Trading Ethics?. Journal of Business Ethics 17, 67–75 (1998). https://doi.org/10.1023/A:1005758413345

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  • DOI: https://doi.org/10.1023/A:1005758413345

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