Chapter 1: An overview of insider trading law and policy: an introduction to the Research Handbook on Insider Trading
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In most capital markets, insider trading is the most common violation of the securities laws. It is certainly the violation that has most clearly captured the public’s imagination. Surely no other corporate or securities law doctrine has provided the plot line of as many crime thrillers and motion pictures as has insider trading. Insider trading also long ago captured the attention of academic lawyers and economists to a degree few other topics in corporate law or securities regulation can match. As a result, it attracts scholars in fields ranging from pure legal doctrine to empirical analysis to complex economic theory. This volume collects cutting-edge scholarship in all of these areas by many of the leading experts in insider trading law and economics. Insider trading jurisprudence is strongly skewed towards US law. This emphasis is not mere academic parochialism or chauvinism, however. The USA remains the world’s largest capital market. More important for present purposes, the USA was one of the first jurisdictions to ban insider trading and remains the jurisdiction in which the ban is most energetically enforced. To be sure, insider trading bans are now on the books in many jurisdictions and there is growing global emphasis on fighting the practice.