alt Hacker NewsMatt Levine pointed out in a past article that the real danger of insider trading are company insiders being incentivised to damage the company to make a quick buck.
Replies
bluecalm • today at 7:14 AM
How is it different than shorting or buying put options and then damaging the company? The tools are already there.
➕ show 3 replies
> insiders being incentivised to damage the company
I'd like to emphasize that this incentive doesn't have to be an accidental find by the insider either: The "market" can end up facilitating anonymous crowd-sourced bribery by enemies or competitors, who create the potential for profit knowing that eventually an insider will take the other end of the implied deal.
Every time I see someone dismissing these kinds of issues--especially someone whose salary depends on not-understanding it [0] --I imagine how their tune would change if the shoe was on the other foot. For example, if someone created a "prediction market" where people could anonymously bet on unusual deaths or serious injuries of... prediction-market executives.
[0] https://quoteinvestigator.com/2017/11/30/salary/