Regulation: Insider trading accusations fuel public’s lack of trust in bankers

Regulators’ clampdowns on financial malpractice may cause a retreat from market participation.

The recent insider trading allegations in the US and UK can only add more fuel to the fire of public opinion when it comes to financial institutions.

It’s understandable that the authorities are channelling their efforts into the crime – they want to show the public that they are clamping down on financial institution misdemeanours, and insider trading is quite frequent, and can be uncovered relatively simply by sifting through trading data.

In the scheme of things, profits for insider traders are pretty small.

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