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Insider Trading Regulation in Transition Economies

  • Robert W. McGee

Insider trading is generally perceived as evil or at least unethical. The press and television show people being arrested and led away in handcuffs for engaging in it. The media has nothing good to say about the practice. Politicians enhance their careers by being against it. Commentators make it sound like all insider trading is illegal. Yet some forms of insider trading are perfectly legal (Shell 2001) and some kinds of insider trading are not unethical. In other words, there is a widespread misperception on the part of the public about insider trading.

This misperception has spread to the transition economies that are in the process of converting from centrally planned systems to market systems. This is unfortunate, since there is evidence to suggest that at least some kinds of insider trading are healthy and beneficial for an economy. Thus, transition economies that blindly outlaw all insider trading are unknowingly harming themselves and doing an injustice to the people they are supposed to represent.

Keywords

Corporate Governance International Monetary Fund Transition Economy Inside Trading Fiduciary Duty 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© Springer Science + Business Media, LLC 2008

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  • Robert W. McGee

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