Wednesday, November 19, 2008

SEC, Mark Cuban, and "Insider Trading"

The SEC going after Mark Cuban for insider trading is completely ridiculous. Insider trading laws were designed to prevent people within the company from screwing over the other investors. It's primary use, though, including this use of it, however, is a clear abuse of power. The SEC doesn't go after everybody, but just whoever they pick and choose. The law is such that if you hear anything from anybody who might know something, and you use that information to sell a stock, you are engaged in insider trading — so let’s be honest here, that this is designed so the federal government can go after whomever they want whenever they want. So you can’t use information to make a decision? This is a clear violation of the very basis of the market economy. I hope Cuban does have evidence that he didn’t even violate the unjust law they are trying to enforce. Good for him for standing up against these thugs who call themselves our federal government. David Henderson at EconLog discuss this issue at well, and go over a lot of the economics behind it (and why the law is a dumb one overall).
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