the OP isn't wrong about insider trading - it's just that it lacked the crucial bit about being _transparent_ about insider trading.

Current insider trading laws are about _preventing_ it (but it still happens). This makes it so that insiders who do trade and get away with it make bank, but this does little to benefit the over all market information equilibrium.

What needs to make insider trading "good" (instead of bad), is to make the insider's trades 100% transparent and instant (instead of the months of SEC filing currently needed before it becomes public info). Doing this will ensure that insider's trades immediately gets reflected and copied/arbitraged against, and will allow the price of a stock to reflect information not yet released but is acted upon by insiders.