The academic debate about the desirability of prohibiting insider trading is longstanding and as yet unresolved. Until Henry Manne’s 1966 book, Insider Trading and the Stock Market, the debate centered on whether insider trading is unfair to public investors who are not privy to private corporate information. However, the fairness approach is malleable and indeterminate and thus does not lend itself to clear-cut policy prescriptions. Since Manne’s book, the focus of the debate has been on the effect of insider trading on economic efficiency. Manne argued that, contrary to the prevailing legal and moral opinion of the time, insider trading is desirable because it is economically efficient and thus ought not to be regulated. In contrast, Manne’s critics argue that insider trading is inefficient and thus ought to be regulated.
Beny, Laura N. "Insider Trading Rules Can Affect Attractiveness of Country's Stock Markets." Law Quad. Notes 50, no. 1 (2007): 73-5.