Fairness, Efficiency and Insider Trading: Deconstructing the Coin of the Realm in the Information Age

Whether and how the federal securities laws should restrict insider trading is one of the most hotly debated topics in the securities law literature. Paradoxically, both the theoretical analysis and the legal rules concerning insider trading remain extraordinarily vague and ill-formed. What is the special character of insider trading that leads to this apparently irresolvable puzzle? In this Article, I argue that there is, in fact, nothing special about insider trading that creates this dilemma, but rather there is something special about the nature of information itself. Accordingly, this theoretical dilemma is not limited to insider trading regulation, but rather pervades all areas of intellectual property law. In this Article, I situate insider trading regulation within the larger body of intellectual property law by discussing three potential allocations of the property right in valuable inside information. First, inside information could be treated as a public resource, meaning that a person in possession of inside information could not legally exploit that advantage for personal profit. Such a regime would forbid some or all insider trading by forcing the disclosure to the marketplace of inside information prior to trading. I argue that regulators should reject this alternative because, despite it\u27s proponents\u27 tendency to justify the rule in terms of fairness, this proposal is unlikely to foster fairness in any meaningful way. Alternatively, the property right in valuable inside information could belong to issuers, as the producers of such information. I argue that regulators should reject this alternative because, despite its proponents? tendency to frame their arguments in terms of promoting informational efficiency, a legal regime treating inside information as the property of the issuer is unlikely to further that goal. In fact, such proposals assume an affirmative answer to a question that is fiercely debated in other areas of intellectual property law: does creating a property right in information producers incentivize additional production to the extent necessary to offset the social costs of excluding others from use of the information? Finally, the property right in valuable inside information could reside with outsider traders (traders who possess inside information, but are neither insiders nor constructive insiders of the issuer). I argue that regulators should pursue this alternative because, although there is no need to encourage issuers to create valuable inside information, the need to encourage the dissemination of such information to the marketplace has been recognized for many years. Accordingly, I propose in this Article a system of federal securities regulation that would permit trading by corporate outsiders who did not receive their information in a tip from an insider or constructive insider. Such a system, I argue, provides the hope of filling in the gaps left by the current disclose or abstain system, by encouraging the reflection of material information in stock market price without disclosure of the actual inside information. At the same time, this proposal avoids the perverse incentives and negative impacts on market efficiency attendant in a system that permits insider trading by corporate employees

Characterization of on-road vehicle emissions in the Mexico City Metropolitan Area using a mobile laboratory in chase and fleet average measurement modes during the MCMA-2003 field campaign

A mobile laboratory was used to measure on-road vehicle emission ratios during the MCMA-2003 field campaign held during the spring of 2003 in the Mexico City Metropolitan Area (MCMA). The measured emission ratios represent a sample of emissions of in-use vehicles under real world driving conditions for the MCMA. From the relative amounts of NO_x and selected VOC's sampled, the results indicate that the technique is capable of differentiating among vehicle categories and fuel type in real world driving conditions. Emission ratios for NO_x, NO_y, NH₃, H₂CO, CH₃CHO, and other selected volatile organic compounds (VOCs) are presented for chase sampled vehicles in the form of frequency distributions as well as estimates for the fleet averaged emissions. Our measurements of emission ratios for both CNG and gasoline powered "colectivos" (public transportation buses that are intensively used in the MCMA) indicate that – in a mole per mole basis – have significantly larger NO_x and aldehydes emissions ratios as compared to other sampled vehicles in the MCMA. Similarly, ratios of selected VOCs and NO_y showed a strong dependence on traffic mode. These results are compared with the vehicle emissions inventory for the MCMA, other vehicle emissions measurements in the MCMA, and measurements of on-road emissions in U.S. cities. We estimate NO_x emissions as 100 600±29 200 metric tons per year for light duty gasoline vehicles in the MCMA for 2003. According to these results, annual NO_x emissions estimated in the emissions inventory for this category are within the range of our estimated NO_x annual emissions. Our estimates for motor vehicle emissions of benzene, toluene, formaldehyde, and acetaldehyde in the MCMA indicate these species are present in concentrations higher than previously reported. The high motor vehicle aldehyde emissions may have an impact on the photochemistry of urban areas

Should Subsidies to Urban Passenger Transport be Increased? A Spatial CGE Analysis for a German Metropolitan Area

In many countries passenger transport is significantly subsidized in a variety of ways for various reasons. The objective of this paper is to examine efficiency, distributional, environmental (CO2 emissions) and spatial effects of increasing different kinds of passenger transport subsidies discriminating between household types, travel purposes and travel modes. The effects are calculated by applying a numerical spatial general equilibrium approach calibrated to an average German metropolitan area. In extension to most studies focusing on only one kind of subsidy, we compare the effects of different transport subsidies within the same unified framework that allows to account for two features not yet considered simultaneously in studies on transport subsidies: endogenous labor supply and location decisions. Furthermore, congestion, travel mode choice, travel related CO2 emissions and institutional details regarding the tax system in Germany are taken into account. The results suggest that optimal subsidy levels are either small or even zero. While subsidizing public transport is welfare enhancing, subsidies to urban road traffic reduce aggregate urban welfare. Concerning the latter it is shown that making investments in urban road infrastructure capacity or reducing gasoline taxes may even be harmful to residents using predominantly automobile. In contrast, pure commuting subsidies hardly affect aggregate urban welfare, but distributional effects are substantial. All policies cause suburbanization of city residents and (except for subsidizing public transport) contribute to urban sprawl by raising the spatial imbalance of residences and jobs but the effect is relatively small. In addition, the policies induce a very differentiated pattern regarding distributional effects, benefits of landowners and environmental effects

Corporate governance compliance and disclosure in the banking sector: using data from Japan

Using regression model this study investigates which characteristics of a bank is associated with the extent of corporate governance disclosure in Japan. The findings suggest that on average 8 banks out of a sample of 46 disclose optimal corporate governance information. The regression model results reveal in general that non-executive directors, cross-ownership, capital adequacy ratio and type of auditors are associated with the extent of corporate governance disclosure. Of these four variables, non-executive directors have a more significant impact on the extent of disclosure contrary to total assets and audit firms of banks in the context of Japan. The findings of this paper are relevant for corporate regulators, professional associations and developers of corporate governance code when designing or updating corporate governance code