Can You Say, “Tautology?”
How About “Specious Reasoning?”
It’s hard to find a victim of [insider trading] because for every buyer of a stock there is a willing seller.
–“The Fall of Raj”; The Wall Street Journal (5/12/2010)
So that’s the Journal’s argument against insider trading laws?
Namely, that no one is harmed because in each case someone willingly transacted with the possessor of inside information?
That same logic would exonerate every fraudster from Bernie Madoff to the Twin Cities’ very own Tom Petters.
After all, in each of these cases there were “willing” clients, investors and others who did business with these gonifs (Yiddish for “crook”).
At least until their pyramid of lies collapsed.
No one accused now-convicted inside trader Raj Rajaratnam of defrauding investors ala Madoff or Petters.
But by trading on illegal inside information, he just as surely stole from every Buyer or Seller he transacted with.
That would be any shareholder who — unlike Rajaratnam — didn’t know their company was about to be acquired at a premium, and therefore sold their shares too low.
And it would include any investor who paid too much because they didn’t know — as Rajaratnam did — that the company’s heralded new product was actually a bust, and that its stock would surely tank once the news became public.
My six-year old daughter would grasp the corruption and financial harm inherent in each of these situations.
Too bad The Wall Street Journal doesn’t, too.