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The moral justification used is that the market should be a "level playing field" - that people should only be able to use public knowledge when trading shares, and should refrain from trading if they stumble upon unpublished information. In practice this is a crock of shit of course - the regulators' friends are simply in another taxpayer-financed feeding frenzy. They are ripping off taxpayers to pay investigators and lawyers to rip off traders. If there is any justice in these claims, sellers could take common law action against someone like Ripkin and see if a judge would award damages. My feeling is that such an action would be unsuccessful, but I would be more than happy to let the Common Law decide the issue.
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