INSIDER TRADING

From FEE: “Martha Stewart has been indicted for lying about a stock sale that the government can't prove was illegal insider trading. That's bad enough, but she is also charged with securities fraud -- for proclaiming her innocence! Read all about it in "Free Martha!" by Sheldon Richman.” An Australian reader writes:

In Australia, stockbroker Rene Rivkin has just been jailed for 'insider trading' -- rather paralleling the US Martha Stewart case. Harry Browne says we are wasting public money on an absurd law based on the myth of an unobtainable 'level playing field'. William Anderson says that envy has something to do with it. Crikey makes the point that whatever the rights and wrongs of insider trading, putting Rivkin in prison is a waste of money. He's hardly a threat. A big fat community service order, say free financial advice to a public charity, makes more sense than Rivkin's weekend detention order.

One other link between Rivkin and Stewart is celebrity. This Yahoo article asks if law enforcement agencies stalk celebrities for their own PR purposes. Nobel prizewinning economist George Stigler once did an analysis entitled "Public Regulation of the Securities Market," which concluded that purchasers of new share issues fared no better (or worse) after the creation of the SEC than before. No wonder regulators feel the need to collect high profile scalps! The media, of course pull down prominent people for a living. See here for the BBC job on Martha.

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