Читать книгу Equity Markets, Valuation, and Analysis - H. Kent Baker - Страница 51

Besides information disclosure, enforcement, especially against insider trading, is another mechanism the SEC uses to preserve investor trust. In most insider trades, insiders have an informational advantage, and if they choose to exploit this advantage illegally, they can benefit at the cost of outside investors. The reason is simple – when an insider buys stock believing its price is about to increase, outside investors pay the price as the sellers of those shares. Similarly, when an insider sells knowing that stock price is likely to fall, outside investors are the ones who buy those shares.

By providing liquidity for these informed insider trades, outside investors are losers. Rational investors would never choose to trade against an insider exploiting an informational advantage. A market plagued with insider trades makes participating unappealing for ordinary investors simply due to the loss of money and, more importantly, confidence. The SEC continually enforces regulations to reduce illegal insider trading in the market, and its enforcement is effective in curbing insider trading with superior information.