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The article addresses the rather ambiguous doctrine of “disclose or abstain” with respect to insider trading. A brief review of The Securities Exchange Act of 1934 and court cases and judicial opinions suggests that the only real option available for someone possessing insider information is to abstain from trading on that information. The alternative of disclosing this information and trading does not appear to be a viable alternative. The authors offer a specific recommendation for new regulatory guidelines for disclosure which could, indeed, make this a realistic alternative.

The rise in business activities coupled with free trade liberalisation across countries has entailed an increase in securities transaction as well as insider trading (IT). In fact, IT is characterised by the influence and usage of some prior knowledge concerning sensitive information of a corporate body which results in a financial benefit to the insider trader. The practice of IT is not only unethical but also illegal and this statement is witnessed by the mushrooming of laws across the globe categorising IT as an offence. However, the type of punishment varies in different countries depending on various factors. Consequently, the purpose of this paper is to assess the adequacy and efficiency of IT laws in the context of a developing country being Mauritius.

To achieve the research objective, the Mauritian laws on IT were compared with the corresponding laws of some developed countries like the USA and the UK. As such, a qualitative research method was adopted. In particular, the black letter approach was used to examine the relevant laws of Mauritius, UK and USA on IT. A comparative analysis was conducted concerning IT laws for each country with the view of suggesting recommendations for Mauritian stakeholders to adopt to enhance the existing legal and regulatory framework on IT.

It was found that Mauritian IT laws are largely inspired from both the US and UK corresponding legislation. However, Mauritian laws need to be strengthened by imposing some more severe penalties in terms of fines and terms of imprisonment like the USA has established. The Mauritian Financial Services Commission as the regulator also needs to play a more active role in disseminating particularities of IT laws, offences and penalties to the civil society at large.

At present, this study will be among the first academic writings on the efficiency of IT laws in Mauritius and also, because existing literature is quite scarce on assessing the adequacy of IT legislation in developing countries, this research aims at filling in the gap in literature. The study is carried out with the aim of combining a large amount of empirical, theoretical and factual information that can be of use to various stakeholders and not only to academics.

Throughout the history of commerce, individuals have searched for informational advantages that will lead to their enrichment. In a time of global capital markets, 24 hours a day trading opportunities, and a professional services corps of market experts, informational advantages are pursued by virtually every market participant. This paper examines one of the most vilified informational advantages in modern capital markets: insider trading. In the USA during the 1980s, insider trading scandals occupied the front pages of not only the trade papers, but also quotidian tabloids. Assailed for its unfairness and characterised by some as thievery, insider trading incidents increased calls for stricter regulation of the marketplace and its participants. In the aftermath of the spectacular insider trading litigation in the USA in the late 1980s, many foreign states began to re‐evaluate the effectiveness of their own regulatory structures. In large part, this reassessment was not the produce of domestic demand, but constituted a response to American agitation for increased regulation of insider trading.

There was a time in Britain when even senior representatives of the financial services industry were prepared to be quoted in the press as expressing doubts as to whether there was anything intrinsically wrong with directors and other corporate insiders taking advantage of their better knowledge about their companies in their own investment dealings. Indeed, some even went so far as to say that this was both proper and natural. True it is that, in Britain or for that much in continental Europe, there are few, even among the groves of academia, that would have advanced the theories justifying insider dealing that Professor Henry Manne so clearly articulated in ‘Insider Trading and the Stock Market’. Nonetheless, in what was then the leading book on the law and practice of the stock market, the authors, a leading Queen's Counsel and an eminent stockbroker, expressed the view in 1972 that a stockbroker who learnt even privileged information should not allow this to operate to the detriment of his client. Having said this, Sir Winston Churchill complained that it was defamatory to assert that advantage had been taken of ‘inside information’ during the so‐called Marconi scandal in 1911, and there are comments in a report to the House of Commons by special commissioners as early as November 1696 roundly criticising promoters of over‐valued stock selling out, in the entrepreneurial fashion eloquently advocated by Professor Manne, on the basis of their privileged knowledge and position. Thus, discussion of the pros and cons of insider dealing, at least in Britain, has tended to be emotional rather than based on economic or even pseudo‐economic analysis of empirical data. Even the surveys that have been conducted on attitudes to the practice would hardly impress a statistician.

Hypothesizes that the whole concept of “insider trading” is being overplayed. Is the “average” share purchaser disadvantaged? After analysing the case law, the legislation (and proposed legislation) and the financial theory of efficient markets, concludes that insider trading exists only in the strong market hypothesis and only when a fiduciary duty is established. This is not a zero‐sum game in which one wins and the other loses – everyone can win, some maybe more than others. No one is being cheated; there is no way to establish parity of information nor would most investors know how to use it if it could be established. It appears that we could be embarking on a counter‐productive campaign that will punish those who achieve what their profession requires, all the necessary information on which to make an investment decision; particularly if they achieve it first.

Trading in securities on the basis of non‐public information is too lucrative a temptation ever to disappear entirely. Nevertheless, most qualified observers believe that US enforcement agencies have been reasonably effective in reducing the extent of insider trading in the US. This has been accomplished, moreover, despite the fact that there is no single US law that simply and comprehensively outlaws such trading.

With all of the noise surrounding the promulgation of Regulation FD, It will be the subject of many articles and much analysis. This piece gives a background view of the origins of the rule. It also goes into the specifics of the rule. Who is covered, as well as exploring its insider trading implications.

In the Netherlands new legislation has come into force in order to deal with insider trading. The legislator followed a new strategy. This time, instead of a provision with well‐defined criteria, a sort of catch‐all provision was created. The aim was to avoid difficulties in proving the offence. As a consequence, a new problem has arisen — usual and accepted behaviour on the stock markets, such as exercising, a green shoe option, is now within the ambit of the penalisation. The Dutch legislator has thus created some exceptions. These developments are analysed in the paper.