We got a lot of heat today on our claim that the prosecution of Raj Rajaratnam is a waste of time.

Readers seem convinced that somehow ordinary investors are being hurt by insider trading. We just don't see it. So maybe you can help us out. In the comments section below, we invite you to propose ways that ordinary investors suffer actual losses because of insider trading. We'll promote the best answers to their very own post.

Keep in mind that we've already refuted quite a few of the arguments people tend to make in favor of criminalizing insider trading.

Buyers are hurt because insider trading buyers push up prices. That's true but diversified investors are as likely to be sellers as buyers in insider trades, so it ends up breaking even.

Sellers are induced to...