Although most people agree that insider trading is unfair and gives those who engage in it an unfair advantage in the stock market, the lack of a codified definition for it makes it difficult to prosecute it as a crime. Defining insider trading at the federal level will clarify what it is, make it easier for federal prosecutors to punish those who engage in it, and help ensure that everyone works off of the same definition of this crime.
This bill is too ambiguous and potentially broad-reaching, to the point where it could inadvertently ban or deter legitimate financial communications and information-sharing that are needed to make the market work. Certain ambiguous phrases in this bill could also be too open to judicial interpretation, running the risk that judges — not lawmakers — will have the final say on how it’s implemented.