The government’s historic crackdown on insider trading has shaken Wall Street. To date, authorities have filed charges against roughly 80 individuals, winning at least 78 of those cases through either a guilty plea or conviction at trial. Along the way, they’ve brought down hedge fund titan Raj Rajaratnam of the now defunct Galleon Group, and forced Steven Cohen’s SAC Capital Advisors to end its business of managing money for outside investors.
The dragnet has also revived a debate over whether insider trading should even be illegal to begin with. While supporters of tougher enforcement say the ban helps to “level the playing field,” critics argue that the costs of ridding markets of such illicit deal-making outweigh the benefits. Some go as far as to call it a victimless crime.
With that it mind, we invited two Wall Street experts to join us for a debate on the issue. Arguing in favor of decriminalization is John Carney, a senior editor for CNBC.com and co-author of the site’s NetNet blog covering high jinks on Wall Street. Arguing against the motion is Matthew Yglesias, a business and economics correspondent for Slate and the author of The Rent Is Too Damn High. Here’s what they had to say: