system
Given the following post, respond as if you're commenting on Reddit:
human
CMV: Insider trading should be legal

Insider trading, for those of you who aren't familiar with the term, is the practice of trading (i.e. buying or selling) a public company's stock by individuals with non-public knowledge about the company. Inside trading is considered a felony. For example, in 2001 Martha Stewart had a significant amount of stock in a drug company called ImClone. When a new drug by ImClone failed to get FDA approval, Stewart's broker tipped her off that the stock prices were about to fall dramatically. Stewart sold $230,000 in ImClone shares the day before the failure to get FDA approval became public knowledge. Ultimately, Stewart was found guilty of insider trading, which lead to five months in prison, five months of home confinement, and two years probation. Stewart is now a convicted felon.

This all brings me to my point of this CMV. I can think of no reason why insider trading should be considered illegal, and especially why it should be considered a felony. Typically the designation of felony is reserved for only the most heinous of crimes- such as murder, rape, assault, etc. It is absurd to believe that insider trading is anywhere near these crimes. Some may say that insider trading should be illegal as it gives some people an unfair advantage when it comes to buying and selling stocks. But is that really a good enough reasoning to make it illegal? There are numerous legal ways that people can gain an unfair advantage in the stock world- certainly nobody is going to arrest Warren Buffett's daughter if Buffett gives her stock advice. Furthermore, who exactly gets harmed by insider trading? Insider trading may be the ultimate example of a victimless crime. Insider trading results when a willing buyer and a willing seller agree to trade property that the seller rightfully owns, with no prior contract being made between the parties to refrain from trading if there is asymmetric information. Even Milton Friedman, a Nobel laureate in economics said-

"You want more insider trading, not less. You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that."

So there you go, CMV. Try and change my view on insider trading.

EDIT: Wow, I'm really REALLY overwhelmed by the amount of responses this post has gotten. I'm pretty sure my view has been changed, but I can't really point out a single post that changed my view, so I'm not sure what to do about deltas. If you really want a delta and think you deserved one, message me and I'll read through your post. If it helped change my view, I'll give you the delta. Thanks for the discussion, CMV. I will fully admit that I didn't know much about economics coming into this thread, and that I was fully aware that my view on insider trading was lacking and came from a place of ignorance. I'm glad that I got a chance to learn a lot on the subject, as there are obviously many people here that know infinitely more about economics than I do. Once again, thank you.
gpt
>Insider trading may be the ultimate example of a victimless crime. 

Not really. Let's say Mark Zuckerberg knows that the quarterly report for Facebook is coming out next week and it isn't going to be good, meaning the price of Facebook shares is going to drop. Before this happens, Zuckerberg sells of a large portion of his shares, while still holding enough to have a majority stake in the company. By selling his shares he is decreasing the value of everyone else's shares of Facebook based on his own inside information that has not yet been released to the public.