[bs7280]

You are not wrong, and I should clarify I also have a big problem with the current state of legal insider trading of elected officials, but this polymarket problem is much more extreme. You can get a guaranteed 100-1 payout by blowing up some random people on the other side of the planet. Way worse than making even 2-5x on a leveraged futures bet with insider info. In that example, the victim is usually just other rich people.

[JumpCrisscross]

If we want to go turtles all the way down, we could create a market to predict trading by decision makers and thus incentivize leaks from the betting markets.

[eru]

Well, insider trading should be legalised in general. It would be better for the general public.

See https://en.wikipedia.org/wiki/Insider_trading#Arguments_for_...

[graemep]

It would deter those who are not insiders from investing as returns would shift from them to insiders.

As the biggest social benefit securities markets provide is to enable raising capital this is a huge drawback and makes things worse for the general public.

[eru]

> It would deter those who are not insiders from investing as returns would shift from them to insiders.

Retail investors should be index funds anyway.

Until fairly recently there was no 'insider trading' you could get in trouble for in commodities in the US. That hasn't stopped non-insiders from trading in commodities.

Also, even if insider trading is legal, that doesn't mean your company needs to allow it: you can still punish your own employees for it, and eg claw back bonuses and sue for breach of contract and breach of fiduciary duty.

The main thing the (American) laws against insider trading does what private contracts can't do is to make the golf buddy liable, too.

In any case, American insider trading regulation is already laxer than French insider trading law. And it doesn't look like French companies have an easier time raising capital.

[graemep]

> Retail investors should be index funds anyway.

That does does not solve the problem as insider traders will still be shifting profit to themselves. You still need non-insiders (not necessarily retail investors) to make the market work - even for insider trading to work you need a non-insider to trade with.

> Until fairly recently there was no 'insider trading' you could get in trouble for in commodities in the US. That hasn't stopped non-insiders from trading in commodities.

Can you show that it had no impact on how non-insiders traded? How recently was recently?

> Also, even if insider trading is legal, that doesn't mean your company needs to allow it: you can still punish your own employees for it, and eg claw back bonuses and sue for breach of contract and breach of fiduciary duty.

A lot less of a deterrent, and a lot of people with access to inside information have a lot more to gain than to lose.

> In any case, American insider trading regulation is already laxer than French insider trading law. And it doesn't look like French companies have an easier time raising capital.

Both do have insider trading laws so both are probably good enough, and there are a lot of other variables.

[tim333]

So if you buy stock in company A, have it go to zero because the business went bust, find the CEO already knew it was bust when he was selling the stock to you, you'd be fine with that?