Abstract
Insider Trading: Should it be legalized or remain illegal?
It is important first and foremost to define the term insider trading. Insider trading is the trade of a corporation's stock or other securities likes bonds or stock options based on material information (information which would be likely to affect a stock's price or might influence investor's decisions) that is not available to the general public. It is prohibited in the United States by the Securities and Exchange Commission (SEC) because it is seen as unfair and because it apparently destroys investor confidence.
The 1976 recipient of the Nobel Memorial Prize in Economic Science, Milton Friedman (1912-2006) believed that insider trading should be legal and that we "want more insider trading, not less". He once said, "You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that".
