OUTSIDER TRADING AS AN inducement DEVICE
Larry E. Ribstein* Bruce H. Kobayashi**
*Richard W. and Marie L. Corman Professor, University of Illinois College of Law Associate Dean and Professor of Law, George Mason University take of Law
This typography canful be downloaded without charge from the Social intuition look for Network Electronic Paper Collection: hypertext transfer protocol://papers.ssrn.com/pape.tar?abstract_id=700961
GEORGE MASON UNIVERSITY SCHOOL OF LAW
OUTSIDER TRADING AS AN fillip DEVICE
Larry E. Ribstein Bruce H. Kobayashi 06-16
GEORGE MASON UNIVERSITY LAW AND ECONOMICS RESEARCH PAPER SERIES
This paper can be downloaded without charge from the Social Science Research Network at http://ssrn.com/abstract_id=888188
OUTSIDER TRADING AS AN INCENTIVE DEVICE
Bruce H. Kobayashi & Larry E. Ribstein* March 2, 2006 Abstract Outsiders often have and look for to trade on material nonpublic information to the highest degree firms. For example, lawyers have traded on advance information about the register of a lawsuit, a social activist has announced a plan to trade on advance information of a boycott, and a hedge fund operator has engaged in a controversial handicraft maneuver in a control contest.
Trading on nonpublic information is mainly permitted if the information was not misappropriated or accompanied by fraud or manipulation or other misconduct. However, recent public focus on the above transactions signals realizable regulation in some specific outlander craft situations. More generally, Ayres and Choi propose giving firms grand rights to decide whether outsider trading in their stocks will be regulated. We argue against broad regulation on the basis that outsider trading can provide incentives for socially beneficial conduct. In particular, outsider trading provides an important way to capitalize on investments in mental property that are not otherwise protected by the intellectual...If you want to get a full essay, order it on our website: Orderessay
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