America has no insider-trading statute. Former U.S. attorney Preet Bharara would like to change that.
The details: The Bharara Task Force on Insider Trading was unveiled in a New York Times op-ed this week. This group of "distinguished former regulators and prosecutors, judges, academics and defense lawyers" will try to come up with a legal formula for exactly what should be considered illegal insider trading.
- It won't be easy. Insider trading is an all but victimless crime, and while the stock market is indeed rigged against the little guy, that has very little to do with illegal activity and a lot to do with baked-in asymmetries when it comes to size and speed and sophistication. In other words, Bharara's first job will be to work out exactly what problem he's trying to solve.
- If Bharara does come up with proposed legislation, it's hard to see why it should fare better than any of the bipartisan bills that have failed in the past. America's traders don't like fetters — and they have very good lobbyists.
