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Not so inside(r) trading

From the NYT Jan. 28, 2016: “Wall Street is a big favor bank,” said John C. Coffee Jr., a professor and expert in securities law at Columbia Law School. “There’s a culture of reciprocity.” Exchange transactions characterize markets. Creative minds with adequate social intelligence comb and expand their networks, perceiving an informational advantage – whether illusory or real (and likely not caring either way) – to manipulate outcomes (i.e., gain and profit) through well-timed sell then buy / buy then sell means and methods. The winners are often celebrated in popular media; the losers deduct their losses. Who would have thought that ‘you scratch my back, I’ll scratch yours’ would lead to financial shenanigans?

From the same article Professor Hazen reportedly said “I’d hope the court would go even further and say, if someone is giving you a tip or valuable information, then the presumption is they’re getting something in return,” he said. “It may just by a psychic benefit, but that should be enough. You shouldn’t have to prove an immediate tangible benefit.” I wonder when this reasoning will apply to political campaign contributions? (Dis)honest services fraud?