The Atlas Society's Business Rights Center Announces New Article "The Morality of Insider Trading"

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In the new piece, Alexander Cohen argues that insider trading ought to be legal. There’s nothing wrong with trying to learn about businesses so that you can make your investment decisions on the basis of the best information—in fact, understanding situations so that you can take action based on the facts is an essential part of living as a human being. Yet this is what Raj Rajaratnam, who went to prison for 11 years on Monday (U.S. v Rajaratnam (09 Cr. 01184) in the United States District Court for the Southern District of New York), was sentenced for: Getting the best information he could and trading on it.

Alexander R. Cohen

To live a fully human life requires acting on your knowledge, not evading it. The prohibition of insider trading is immoral.

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Alexander R. Cohen, Managing Editor of The Atlas Society's Business Rights Center has just published an online article entitled “The Morality of Insider Trading”.

Cohen is available for discussion of the article and can be reached at (202) 296-7263 ext. 6 or acohen(at)atlassociety(dot)org.

In the article, Cohen argues:

The insider trading laws require corporate employees who learn important facts in the course of their jobs to pretend they don’t know those facts when they invest in their company’s stock—even if that means holding stock their knowledge gives them good reason to predict will lose value. But morality requires acting on your knowledge, not trying to suppress it.
Insider trading is said to give some people unfair advantages, but many market participants have different advantages. Some are mathematical geniuses, some are experts on particular industries—and some have or can get inside information. Insider trading law protects the advantages of stock-market professionals, who can dedicate their time to examining large quantities of public information, by prohibiting people who are busy running companies from trading on much of the most valuable information they learn in their jobs.
Some people say insider trading hurts the counterparty, but even if you buy a stock from an insider trader and it declines, it’s not the reason for his trade that hurts you. You were out in the market based on your own judgment, because you thought the deal was a good one. If you lose money, it’s because you were wrong, not because the person who sold you what you wanted to buy had inside knowledge.

Insider trading law demands that people pretend to be blind—that if they know “material nonpublic information” about a company, they not act on it. But to live a fully human life requires acting on your knowledge, not evading it. The prohibition of insider trading is immoral.

About The Business Rights Center
Founded in 2009 as a program of The Atlas Society, The Business Rights Center (BRC) is dedicated to defending businessmen who are defamed by the media and unjustly prosecuted by the government. The BRC also strives to expose and challenge the false premises of today’s post-Enlightenment, anti-business intelligentsia. The BRC serves its mission through the investigation of major cases, backgrounders on major business issues, interviews, media reviews, a “Business Rights Watch” blog, editorials/Op-Eds, and live events bringing businessmen, media, and scholars together to debate and discuss key issues. Learn more online about the Business Rights Center at or call Alexander R. Cohen, Managing Editor at (202) 296-7263 (AYN-RAND) ext. 6.

About The Atlas Society
Founded in 1991, The Atlas Society (TAS), a 501(c)(3) nonprofit organization headquartered in Washington DC, develops and promotes open Objectivism: the philosophy of reason, individualism, achievement and freedom. Objectivism was founded by Ayn Rand (1905-1982), the author of Atlas Shrugged, The Fountainhead, The Virtue of Selfishness, and other works. As the founders of open Objectivism, TAS believes that the philosophy is a body of knowledge open to expansion and revision, through rational inquiry and open discussion and debate. The organization's programs reach a broad audience ranging from the general public to graduate students in philosophy. To contribute to The Atlas Society and its distinguished staff and Board of Trustees visit


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