Comparing Insider Trading in the United States and in The European Union: History and Recent Developments

by Marco Ventoruzzo

MPILux Working Paper 5 (2014)

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ABSTRACT: In the European Union insider trading has been regulated much more recently than in the United States, and it can be argued that, at least traditionally, it has been more aggressively and successfully enforced in the United States than in the European Union.  Several different explanations have been offered for this difference in enforcement attitudes, focusing in particular on resources of regulators devoted to contrasting this practice, but also diverging cultural attitudes toward insiders.  This situation has evolved, however, and the prohibition of insider trading has gained traction also in Europe.  Relatively few studies have however focused on the substantive differences in the regulations of the phenomenon, especially with respect to their underlying tenets.  This work contributes to the debate by contrasting and comparing the “philosophy” of insider trading regulation in the U.S. and in Europe, putting them in an historical perspective and considering some very recent developments in this area of both sides of the Atlantic.

KEYWORDS: Insider Trading Regulation, Enforcement, Information, United States, European Union.