First of all, I assume, as always, a propertarian approach to life. That means that everything that can be owned is PRIVATE PROPERTY. Collective ownership is twisted, illogical, and unethical for a variety of reasons. Everything falls into a framework of individual ownership through either personal production, exchange, or salvage.
Now, with that being said, can trade secrets and "insider knowledge" be considered property. The answer is a resounding "NO!" In order to believe that it is requires adherence to the concept of intellectual property. Intellectual property is a bad idea, just like collective ownership, for many reasons. Take for example, the musicians who believe they own their songs. The literal implication of this is that they believe to have ownership, and therefore sole rights, to an amalgamation of sounds. How in the world could anybody own sound though? That makes no sense and neither does intellectual property. Nobody owns ideas. Nobody owns music, noise, poetry verses, or anything of the like.
Trade secrets are as un-ownable as music. How can anybody own information?
However, since trade secrets and information ultimately do not belong to anybody in particular, there's an easy temptation to think that everyone has a right to them (the so-called rights of the collective), that they have to be fully disclosed to all parties as if life were nothing but a giant courtroom. There is no basis for that conclusion; not ethically; not logically.
Therefore, I conclude that insider trading is perfectly fine since nobody owns knowledge and nobody is obliged to disseminate it. The only thing that is problematic is LYING about information because lying is fundamentally immoral regardless of any trading involved.
Just because information can give a huge advantage to one party does not mean there is anything wrong. This is just another caveat emptor situation. If you know you're going into a business situation and you have a deficiency of knowledge, you would be advised to enter carefully or avoid the business situation altogether.
Again, lying about information is wrong. The free market solution to market liars is to cease doing business with them. Nonetheless, there is no reason to punish anybody on the basis of insider trading, which is nothing more than capitalizing on superior organizational ability and information management. Capitalism is dependent on wealthy owners who know better ways to put capital to use. When the state enforces the distribution of information, it effectively socializes it and puts it in the hands of those who may not know how to utilize it best.
Punishing and criminalizing insider trading is nothing more than socialization of opportunity when in fact opportunity should be free and accessible to those who work to earn them. Opportunity is not free. The market is not about ameliorating everyone's knowledge gap. Knowledge has to be earned like everything else even though nobody owns it. We should do away with all laws that penalize insider trading.
