Do you own any stock? Not sure how you can say that someone with insider info that profits from that information does not hurt your holdings. Please explain your reasoning.
Suppose you have stock in Boeing Aerospace and someone with major holdings finds out that the next major sale of aircraft, to say China will go to Airbus instead of Boeing. They (it will most likely be several big stock holders which could equate to several thousand shares of stock) dump their holdings in Boeing and buy Airbus. When the contract is announced, Boeing's stock falls and Airbus goes up. To exacerbate the situation, the sale of Boeing stock makes the price fall further.
OK, look at it this way. Let's say I think Boeing is a great company and want to buy some stocks in it. You have insider information about that sales contract and want to dump your Boeing stocks so you can buy stock in Airbus. You sell them to me for less than what I would pay for them if I bought them through a broker. Eventually, the contract is announced, Boeing's stock falls and Airbus's stock goes way up. You then sell your Airbus stocks, buy a nice house in the Caribbean, and spend the rest of your life sipping frothy drinks by the pool.
In a way you helped me and the general public by introducing that information to the market quicker, and I lost money, but I would've lost more if I had paid a higher price for the stocks.
Granted, as it stands right now, insider trading is still a crime and anyone caught engaging in it should pay for their crime
http://articles.marketwatch.com/2011-05-17/commentary/30748402_1_insider-trading-raj-rajaratnam-shares
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