Insider trading amongst high tier lawmakers: a comparative study looking at the United States and the European Union

Abstract

Insider trading law when compared between the United States and the European Union largely differs from the classical insider trading concepts all up to the lawmaker insider trading concepts. Overall when evaluating the European Union and United States' approaches regarding dealing with insider trading two main conclusions can be drafted. The European Union deals with normal insider trading in a much better way than the United States with its most recent regulation basically removing the opportunity for insider information to existing by forcing publicly traded companies to share any significant information with the general public. The United States does not have such a requirement which leads by nature to more potential insider trading within the United States financial market. Nevertheless, the United States manages to deal with lawmaker insider trading on a much more effective basis than the European Union since it requires lawmakers to disclose their buying and selling of financial instruments. Overall guarantees for more transparency which allows the United States to track abnormalities in trades performed by lawmakers whilst it is non-existent in the European Union. Nevertheless despite the transparency requirements reports still emerge about lawmakers abusing their special status which leads to a potential solution of barring government employees from trading on the stock market altogether.