Luc Van Liedekerke, MSc, PhD Biography

"Balancing the pros and cons of insider trading, one has to conclude...that there is very litle harm caused by insider trading. First, one has to stress the social gains that come with informational efficient capital markets. The more prices reflect information accurately, the better prices guide capital investment in the economy. Moreover, it creates an additional signaling device for management to communicate complex news in a credible way. The confidence of investors is not expected to decline, empirical studies showed no decrease of market liquidity and the non-informed counterpart of the insider was not harmed, on the contrary. Another important social benefit from insider trading is the market-based compensation scheme, which makes it also possible to reward the innovative and entrepreneurial inputs of corporate insiders..."