Insider Trading and the Social Contract

Business Ethics Quarterly 5 (2):313-328 (1995)
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 Applied Philosophy  Business and Professional Ethics  Social Science
Categories (categorize this paper)
ISBN(s) 1052-150X
DOI 10.2307/3857359
 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
Our Archive

Upload a copy of this paper     Check publisher's policy     Papers currently archived: 26,685
Through your library
References found in this work BETA

No references found.

Add more references

Citations of this work BETA

No citations found.

Add more citations

Similar books and articles
Justice and Insider Trading.Richard L. Lippke - 1993 - Journal of Applied Philosophy 10 (2):215-226.
Where Should the Line Be Drawn on Insider Trading Ethics?Yulong Ma & Huey-Lian Sun - 1998 - Journal of Business Ethics 17 (1):67-75.
Applying Ethics to Insider Trading.Robert W. McGee - 2007 - Journal of Business Ethics 77 (2):205 - 217.
What is Really Unethical About Insider Trading?Jennifer Moore - 1990 - Journal of Business Ethics 9 (3):171 - 182.
The Ethics of Insider Trading.Patricia H. Werhane - 1989 - Journal of Business Ethics 8 (11):841 - 845.
Insider Trading Revisited.Deryl W. Martin & Jeffrey H. Peterson - 1991 - Journal of Business Ethics 10 (1):57 - 61.
The Indefensibility of Insider Trading.Patricia H. Werhane - 1991 - Journal of Business Ethics 10 (9):729 - 731.

Monthly downloads

Added to index


Total downloads

17 ( #280,959 of 2,158,385 )

Recent downloads (6 months)

6 ( #53,252 of 2,158,385 )

How can I increase my downloads?

My notes
Sign in to use this feature

There  are no threads in this forum
Nothing in this forum yet.

Other forums