R. Foster Winans isn't just some ordinary insider trader. He wasn't a guy at a company trading in advance of the company's new product announcement or a merger agreement. He wasn't a guy working at a brokerage trading in advance of an analyst recommendation or front-running client orders.
Winans more or less invented an entirely new kind of insider trading. He was a columnist for the Wall Street Journal who was convicted of trading on his own writing. Before his arrest not many people thought the insider trading laws covered journalists trading on their own writing, especially when they didn't have any formal ties to the companies they were writing about. And after his arrest people still weren't sure: the Supreme Court divided evenly on the question of whether the insider trading regulations covered Winans misdeeds.
All this sort of makes him an expert on insider trading. Or something. And his expertise has led him to a controversial conclusion: insider trading laws should be scrapped.
People invest in the market precisely because they think they know things others don't. It could be as innocent as the belief that Apple will sell more iPods next year, or as questionable as a tip that a private equity group is going to make an offer for a utility.
In between are shipping clerks, accountants, taxi drivers, therapists, corporate officers and anyone else who acquires a bit of information and buys or sells stock hoping to gain an advantage.
Being against insider trading is like being against sin, the libertarian Harry Browne once observed. Like most sins, it principally offends those who don't or can't indulge; like most sins, it shouldn't be a crime.
The scary thing is that this makes so much sense.
Let everyone use what Wall Street knows [International Herald Tribune]