Securities Law Commons^™

Insider Trading And Evolutionary Psychology: Strong Reciprocity, Cheater Detection, And The Expanding Boundaries Of The Law, Steven R. Mcnamara

Steven R. McNamara

Insider trading law has expanded in recent years to cover instances of trading on non-public information that fall outside of the fiduciary duty framework set forth in the landmark cases of Chiarella and Dirks. The trend towards a broader insider trading law moves the law closer towards what evolutionary psychology tells us humans desire when engaging in collective action: that individuals benefit in proportion to the effort or investment they make in a common enterprise. Insider trading law can therefore be understood as a societal response to cheating in group activities, and the recent expansion of the law as …