End Insider Trading? Might as Well Ban Booze

Insider trading is to modern times what bootlegging was to the Prohibition era: Authorities will never be able to stop it, writes Henry G. Manne in the Wall Street Journal. Sure, prosecutors can catch plenty of perpetrators. But "the payoffs are too big and too accessible and the number of willing players too great for the practice to be significantly inhibited by scores of convictions," Manne writes. "The imagination of wealth seekers in using valuable information in the stock market will always outpace the ability of regulators to cope."

What's more, as was the case during Prohibition, the biggest culprits seem untouchable. Manne points to Preet Bharara, the New York City federal prosecutor whose own Al Capone seems to be billionaire Steven A. Cohen. The company Cohen founded, now called Point72 Asset Management, has pleaded guilty to insider trading, while "Mr. Cohen remains personally free of criminal taint." It's typically those lower in the hierarchy who end up in trouble. The ban means "the so-called corruption of otherwise good folks," Manne writes. "It is high time to stop this ridiculous posturing." Click for the full piece. (More Prohibition stories.)