What is it about?
Using the artifice of a hypothetical trial, this article presents the cases for and against insider trading. Both sides in the trial produce as evidence the salient points made in more than 100 years of literature on insider trading. The initial days of the trial focus on the issues raised in the law literature such as fiduciary responsibility, the misappropriation theory, and the fairness and integrity of markets; however, the trial soon transfers focus to issues such as Pareto optimality, efficient contracting, market efficiency, and predictability raised in the financial economics literature. Open issues are then brought up. A jury finally hands down its verdict.
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Why is it important?
This paper is an "Everything You Wanted To Know About Insider Trading" survey. It is a useful read for anyone interested in insider trading. It is a must-read for anyone thinking of writing about insider trading.
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This page is a summary of: Insider Trading Controversies: A Literature Review, Annual Review of Financial Economics, December 2014, Annual Reviews,
DOI: 10.1146/annurev-financial-110613-034422.
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