71 year old famous professional gambling whale Billy Walters was recently convicted of insider trading. Could Steemit bloggers be the next target of regulators and prosecutors? This is the latest example of why insider trading laws need to be changed. #billywalters #insidertrading
Insider trading is another word for due diligence of investments. Insider trading laws are damaging to the economy, inherently unenforceable and unconstitutionally vague, as nobody can precisely understand them all. Insider trading laws were arbitrarily created to apply to some Wall Street related stock investments, but not apply to most other investments. Insider trading laws make it illegal for investors to use the most valuable, accurate and impactful information available. Insider trading laws say that investors must rely on the media or public third party information instead of finding out the better truth from a direct source.
Insider trading laws were no doubt created to placate the public and obfuscate the real problem of a rigged Wall Street. These laws detract from the fact that there is no way to make Wall Street a fair game for the small guys. The big guys have the upper hand six ways from Sunday. There are even many blatant laws that directly state that small investors are expressly prohibited from placing many investments. The cost to the American economy is many billions of dollars per year. When investors feel compelled to omit or ignore the most direct and reliable information about their potential investments, they either cannot invest wisely, or they must invest illegally. No doubt many are investing illegally, simply by encoding their insider information and by using trusted shill buyers so that law enforcement cannot prosecute them.
Gambling is one of those sinful acts (or dangerously fun human activities) that should be legal, but is either illegal or at least publicly frowned upon even when not affected by a job-killing ban. Like booze, gambling is one of those vices that has the capacity to impact individuals and families due its intoxicating and addicting qualities. That's why there is always pressure to keep gambling in the closet. For cultural and historic reasons, American society has placed gambling as worse that drinking, but not as bad as prostitution. The stock market is, or course, a gambling institution that also happens to capitalize companies, both good and bad. And, of course, most important things in life are a gamble, so theres no way to ever make all #gambling illegal. One of the biggest gambles of all, getting married, is always a big bet, and a big risk that involves money and sex. (Hey, isn't that a bit like prostitution? Should we ban marriage?). Wouldn't it be stupid if we had to rely solely on pubic information about our prospective mate? What if it were illegal to date before committing to marriage?
There are serious economic consequences of insider trading laws. Many economists, including leading economics professor Henry Manne, have argued against insider trading laws:
http://capitalismmagazine.com/2004/09/legalize-insider-trading/
The only part of insider trading laws that the public somewhat understands them is that stock investors may not purchase or have someone else purchase some stocks, bonds or options after the investors receive valuable information from someone who works for the company. One problem is that the investor may have received the information by accident, the investor may not remember where they received the information, and the investor may not fully understand the insider information. The information may have come through some kind of media that may render the valuable information as legal rather than insider. The laws do not apply to most other types of investments, where insider trading is the expected norm.
All smart investments demand research and due diligence so that the money and resources are invested in an efficient, cost-effective manner. All top wall street investors take part in obtaining business intelligence that is in the fuzzy gray line or over the line of insider trading laws. Much of it comes from research companies, friends of friends, as well as unknown sources. There's no way to clearly draw the line on what is insider and what is not. Even when there is agreement on what is insider information, the law causes too much damage by preventing investors from placing smart investments. The already unfair stock market is made more unfair by leaving stock prices less accurate because the stock price must wait for the public to catch up before being corrected after the public is informed of the information. Often the public never finds out the information at all, so the correcting trade may never legally be placed. It will no doubt be placed eventually, by someone who simply evades the law and does not get prosecuted.
Billy Walters was recently arrested and convicted, not because of breaking the law, but because he engaged in research, investigation and due diligence related to his legal gambling enterprises, then he honestly and openly talked about the unspeakable act of gambling, and he publicly disclosed the truth about corruption that happens in today's rigged Wall Street. In addition to being an ongoing target of begrudged prosecutors who were unsuccessful in prosecuting Walters in the past, Walters was a wanted man by Wall Street executives who fought back politically against Walters using the legal system.
In the mean time, U.S. Court of Appeals for the 2nd Circuit in Manhattan is to hear an appeal this spring of his conviction in the insider trading case that sent Walters to federal prison for five years.
Should it be made illegal to use private, first-hand information to make investment decisions regarding Steem and Steemit?
https://steemit.com/gambling/@costanza/gambling-whales-or-billy-walters
