Asmenu turinciu išskirtinį priėjimą prie informacijos (insaiderių) prekyba vertybiniais popieriais
Does the Prohibition of Insider Trading Protect Investors?

Summary/Abstract: Insider trading occurs when a person privileged with the material nonpublic information use this special advantage of that knowledge to reap the profits or avoid losses to the detriment of the source of the information and to the investors who trade in securities without possibility to find out inside information. The purpose of this article is to prove the hypothesis that the prohibition of insider trading protects investors in efficient and fair securities market. Prohibiting insider trading is usually justified on fairness and on the ground that timely, precise and definite information is of great value in the financial markets. Insider trading is regarded as a factor, which impairs the attractiveness of securities market. It is argued that such a trading undermines investors’ confidence in the fairness and integrity of the securities markets; nevertheless one group of scholars favors the deregulation of insider trading arguing that the prohibition lacks any rational economic basis. The best protection of investors is the efficient operation of capital markets and properly functioning economy. That is why the main aim of security regulations is to make legal ground for the fair and efficient operation of securities market, seeking the protection of the interests of all investors. The examination of the problem is done in three parts of this article. (...) The author concludes that Lithuanian law in this respect does adequately protect the investors. Insider trading occurs when a person privileged with the material nonpublic information use this special advantage of that knowledge to reap the profits or avoid losses to the detriment of the source of the information and to the investors who trade in securities without possibility to find out inside information. The purpose of this article is to prove the hypothesis that the prohibition of insider trading protects investors in efficient and fair securities market. (...)

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