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- Title
INSIDER TRADING AND EVOLUTIONARY PSYCHOLOGY: STRONG RECIPROCITY, CHEATER DETECTION, AND THE EXPANDING BOUNDARIES OF THE LAW.
- Authors
McNamara, Steven
- Abstract
Insider trading law has expanded in recent years to cover instances of trading on nonpublic information that fall outside of the fiduciary duty framework set forth by the U.S. Supreme Court in the landmark cases of Chiarella and Dirks. The trend towards a broader insider trading law moves the law closer towards what evolutionary psychology insists humans desire when engaging in collective action: that individuals benefit in proportion to the effort or investment they make in a common enterprise. Insider trading law can therefore be understood as a societal response to cheating in group activities, and the recent expansion of the law can be regarded as reflecting a proclivity for fairness as proportionality. An evolutionary psychology-based account of insider trading law also provides a basis for understanding the observed correlation between insider trading enforcement and various measures of the health of the financial markets, as well as a unified jurisprudence of insider trading law encompassing both consequentialist and deontological aspects.
- Subjects
UNITED States; INSIDER trading laws; CHIARELLA v. United States (Supreme Court case); DIRKS v. Securities &; Exchange Commission (Supreme Court case); STOCK exchange laws; SECURITIES industry laws; EVOLUTIONARY psychology
- Publication
Virginia Journal of Social Policy & the Law, 2015, Vol 22, Issue 2, p241
- ISSN
1068-7955
- Publication type
Article