What is Morally Right With Insider Trading

Insider trading per se is obtaining information from non-public sources—private acquaintances, friends, colleagues—and using it for purposes of enhancing one's financial advantage. As Vincent Barry explains, “Insider dealings refers to the ability of key employees to profit from knowledge or information that has not yet become public.” Sometimes such a practice can be conducted fraudulently, as when one who has obtained the information has a fiduciary duty to share it with clients but fails to exercise it, or in some other criminal fashion, as when the information is itself stolen. These are not, however, features of insider trading as such, as understood in the context of the discussion of business ethics. Never mind that in the enforcement of government regulations it is in fact fraud that is cited that makes the conduct illegal that is referred to as insider trading. (Which suggest that the bulk of the relevant law does not concern itself so much with what many in the business ethics community worry about, namely, “justice as fairness,” but with “justice as honoring of contracts.”)