Global Capital Markets Center
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Professor Jim Cox 4 Canterbury L. Rev. 268 (1990) |
ABSTRACT:
This article provides a close analysis of contemporary justifications frequently advanced for the regulation of insider trading. The author provides a coherent rationalization for the prosecution of insider trading. This rationalization is then contrasted with the objectives and provisions of New Zealand's recently enacted Securities Amendment Act of 1988 which provides private remedies against insider trading violations. Part I of the article provides a close examination of the question whether insider trading is a victimless crime by analyzing the unfairness argument, the harm to investors, the manipulation associated with insider trading, the allocational efficiency argument, and the protection of another's information. This article next provides an economic analysis of public protection of private property in Part II. Part III examines the efficiencies and pitfalls of the New Zealand scheme of regulation and Part IV analyzes the impact of the Sharemarket Inquiry under the New Zealand regulations.
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