I disagree. It is about fairness to some degree. Insider trading undermines the integrity of market. Which is why Pelosi's statement here is so absurd.
Not my area of the law, but I don’t think he’s right.
I think the general consensus is essentially “fairness” for utilitarian reasons. Markets are important, and insider trading discourages investment because it creates an impression of unfairness and increases uncertainty.
> Not my area of the law, but I don’t think he’s right.
As far as I know that's how the law is structured. A second source that say the same thing:
>KESTENBAUM: And she says while everybody gets upset at insider trading because it gives someone an unfair advantage, that is not the legal reason why it gets you into trouble. The argument used these days in court for why it's illegal is that insider trading amounts to stealing information from a company. It's like theft. And so for that reason, proving that someone traded on insider information - that is not enough to convict them. If, say, a financial document from some company blows out the window, and you happen to find it sitting there on the sidewalk, Sarah says it's not insider trading for you to use that to make money in the stock market because you didn't steal it.
As for your "fairness" hypothesis, it really doesn't hold. Is it "fair" that hedge funds can afford to spend millions on alternative data sources (eg. flying helicopters with thermal cameras over oil fields, to see how much oil is being stored) to get a edge over traders who can't? Probably not. Is it banned? No. https://www.bloomberg.com/opinion/articles/2013-12-19/helico...
Okay, but that's not how laws work. You can't go to the judge and say, "your honor, this person violated the SEC's mission statement and is therefore a criminal!". The mission statement might be correlated with what the law says (it might also not be, see: "to serve and protect"), but the ultimate source of truth is statues/precedence. Given that your claims contradicts what two well credentials individuals[1] claim, it seems prudent to require more evidence than just "that's SEC's mission statement". A link to the exact section of the relevant statue, or a relevant appellate court decision would do.
[1] matt levine was "a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz, and a clerk for the U.S. Court of Appeals for the 3rd Circuit", and the person interviewed for the NPR story was "a defense attorney" and "now a fellow at Yale Law School".
