Insider Trading

Closely tied to the idea of market efficiency is the idea of insider trading. 

Insider trading is always an interesting topic.  On 5/26/99 the SEC brought charges against 25 investors in the largest case of insider trading in US history.   the case deals with the 1995 IBM takeover of Lotus.  The Washington Post's article on this story is here.   CNNfn's version of the story is here.

For a fuller flavor of the laws here are some cases involving illegal Insider Trading: Pillsbury had a case involving a the Supreme Court ruling that the SEC was correct in going after a temporary insider trading in Pillsbury stock, Tyson Foods is an even more clear cut case where an executive tipped a friend, and finally a case involving employees at AT&T. 

It is somewhat comforting that the SEC shows that it understands the REMM version of human nature and now has a reward policy for turning in illegal insider traders.  The site also has their definition of insider trading. 

Finally someone (no name is listed) at Georgia State has an interesting site on insider trading. 

Of course not all insider trading is illegal.  These legal trades are widely followed as a means of trying to "use" the information that insiders have.   For example, many mutual funds watch the insider insider trading reports that are widely available. If you would like to track insider trades both Bloomberg lists those trades filed with the SEC.