Law Commons^™

Legislation And Legitimation: Congress And Insider Trading In The 1980s, Thomas W. Joo

Thomas W Joo

Orthodox corporate law and economics holds that American corporate and securities regulation has evolved inexorably toward economic efficiency. That position is difficult to square with the fact that regulation is the product of government actors and institutions. Indeed, the rational behavior assumptions of law-and-economics suggest that those actors and institutions would tend to place their own self-interest ahead of economic efficiency. This Article provides anecdotal evidence of such self-interest at work. Based on an analysis of legislative history--primarily congressional hearings--this Article argues that Congress had little interest in the economic policy effect of insider trading legislation in the 1980s. Rather, …