Insider Trading: Moral and Policy Conflicts Seminar

Credit Hours: 2

This seminar examines the competing and sometimes conflicting moral and policy goals driving U.S. insider trading law. Students will explore case law and scholarship that highlights the tension between the goals of achieving “fair” markets and “efficient” markets. Students will also examine competing notions of fairness and efficiency. For example, fairness is defined differently under insider trading law than it is under trade secret law. Insider trading doctrine currently treats trading with an information advantage as unfair in certain situations. However, trade secret law encourages transactions in which one party has a significant information advantage. A less dramatic tension exists between Pareto, Kaldor-Hicks, and other standards of economic efficiency. Students will look for the explanations and the implications of these competing standards. Grades will be based on a research paper and class participation.