Journal of Business Ethics

, Volume 9, Issue 3, pp 171–182

What is really unethical about insider trading?

  • Jennifer Moore

DOI: 10.1007/BF00382642

Cite this article as:
Moore, J. J Bus Ethics (1990) 9: 171. doi:10.1007/BF00382642


Insider trading is illegal, and is widely believed to be unethical. It has received widespread attention in the media and has become, for some, the very symbol of ethical decay in business. For a practice that has come to epitomize unethical business behavior, however, insider trading has received surprisingly little ethical analysis. This article critically examines the principal ethical arguments against insider trading: the claim that the practice is unfair, the claim that it involves a “misappropriation” of information and the claim that it harms ordinary investors and the market as a whole. The author concludes that each of these arguments has some serious deficiencies; no one of them by itself provides a sufficient reason for outlawing insider trading. This does not mean, however, that there are no reasons for prohibiting the practice. The author argues that the real reason for outlawing insider trading is that it undermines the fiduciary relationship that lies at the heart of American business.

Copyright information

© Kluwer Academic Publishers 1990

Authors and Affiliations

  • Jennifer Moore
    • 1
  1. 1.Department of Philosophy, College of Arts and SciencesUniversity of DelawareNewarkUSA