alt Hacker NewsThere are explicit insider trading forms such as SEC forms 3, 4, and 5. Insiders are allowed to trade as long as it is declared to the government. The issue is with trading while having material non public information. Frequently trades are executed on an explicit schedule with rule 10b5-1 to act as a defense against accusations of trading on MNPI.
The first paragraph of the article drove me insane for that reason. MNPI is one of the bedrocks For a stable market system. If you trust, on some level, that the people who are counterparty to your trade and not pulling one over on you you’re more likely to participate in the market. The more that trust degrades, the less likely people are to want to interact with the market. The fewer people, the worse prices/spreads get.
Efficient and tight markets are almost entirely predicated on being able to determine that any informational asymmetry is irrelevant over differing time horizons.