What Is Insider Trading?

Aside from being the most sensational insider trading case of recent years, and the biggest ever to involve a hedge fund, the Galleon case raises questions about what exactly constitutes insider trading at a time when so many market participants, such as hedge funds and other opaque investment pools, live or die on their ability to gather information that competitors don't have. Regulations on insider trading have gradually tightened over the years in the U.S. and many other countries, but some economists argue for a complete course reversal, making insider trading legal.