[dragonwriter]

> They do though; they have incredibly wide discretion and things like insider trading effectively exist only via SEC regulation.

No, insider trading is the subject of laws passed by Congress; at a minimum, the Insider Trading Sanctions Act of 1984 and Insider Trading and Securities Exchange Act of 1988. And those laws are where the SEC enforcement powers over insider trading come from.

[kyrieeschaton]

That's true to a point, but neither of those pieces of legislation actually define "insider trading" (although they do establish penalties for it). The power is more or less delegated to the SEC. There have been recent attempts to codify their present interpretation in statutory law.

https://www.natlawreview.com/article/house-passes-proposed-l...

Congress in general gives extremely wide power to particular administrative bodies that does result in conduct being treated as legal or illegal purely as a result of shifting regulations. You can argue that it "derives from" legislation at some level of removal so they're not "making law"; that's a distinction without a difference.

[Retric]

Stock trading is over 400 hundred years old so terms like insider trading are meaningful even without a strict definition. The SEC’s role is one of clarification not lawmaking.

Consider, the proposed law uses the word espionage does that cover say counting the number of trucks leaving a factory? That’s the kind of thing where any specific choice is reasonable as long as everyone operates under the same rules.

[dragonwriter]

> That's true to a point, but neither of those pieces of legislation actually define "insider trading"

That's true in the narrow sense that they don't have a definitions section with the term “insider trading” and a definition. They both use “insider trading” in their titles and internal headings of the code sections they add, and specify the covered behavior (which differs slightly between the two) in the body, “purchasing or selling a security while in possession of material, nonpublic information” (15 USC 78t-1) and “purchasing or selling a security or security-based swap agreement while in possession of material, nonpublic information, or...communicating such information in connection with, a transaction on or through the facilities of a national securities exchange or from or through a broker or dealer, and which is not part of a public offering by an issuer of securities other than standardized options or security futures products” (15 USC 78u-1.)

While Congress did give the SEC the ability to set the rules around insider trading, it didn't give the SEC a blank check which the SEC used to pull the idea of insider trading and regulating it out of thin air.