Henry Manne, dean emeritus of the George Mason University law school, doesn't think too highly of government attempts to combat insider trading.
"The much-hyped modern insider-trading prosecutions and their results are reminiscent of nothing so much as Prohibition-era government attacks on bootleggers," he writes in
The Wall Street Journal.
"There is about as much chance of stopping trading on undisclosed financial information as there ever was of stopping the consumption of booze."
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Too much money is washing around global stock markets "waiting for an edge" for the government's effort to be successful, Manne says.
"Information is more mercurial than mercury and will seep into some crevice in the system no matter how many channels are closed."
The famous fight of Eliot Ness and his Bureau of Investigation colleagues against Prohibition in the 1920s and 1930s resulted in the convictions of hundreds of "functionaries with no discernible effect on the amount of alcohol consumed," Manne says.
That story's not much different than the 80 insider-trading convictions won by Preet Bharara, the federal prosecutor in Manhattan, he writes.
Meanwhile, prosecutions for insider trading could soon be at risk, as it looks like the rules will be changed, "making it possible for smart professionals to escape liability even if they are caught," writes
Floyd Norris of The New York Times.
"That change seems likely to be ordered by a three-judge panel of the United States Court of Appeals for the Second Circuit, which heard arguments [last] week on whether to reverse the convictions of two hedge fund managers."
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