It seems perfectly natural and innocuous that those with the most information would want to profit from it, and doing so isn’t illegal anywhere else. So why is it prohibited to make trades based on information not everyone has? What undesirable thing does this prevent?
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it gives individuals with access to confidential information an unfair financial advantage over other market participants. By using inside information they profit from trades that would not be profitable for ordinary investors without such access. This creates an uneven playing field and can have a detrimental effect on market integrity, which adversely impacts all investors.
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