| Abstrakt: |
Technological advances have made it possible to scour vast arrays of data in the digital world with algorithms. Investors, in particular hedge funds, are spearheading this technology as means for investment research. In the discussion of this growing trend, the spectre of potential insider trading always looms large and is oft-cited, but seldom analysed in detail. This article looks closely, while trying to be mindful of real-world practices, at the state of play in insider trading doctrine with regard to investments made in reliance on scraped data. Additionally, the article clearly lays out the arguments for and against regulating data scraping via insider trading law - bringing to the forefront the policy concerns which may well be underlying future regulatory and judicial activity in this area -, focusing on incentive mechanisms. As for the outcome regarding current legal doctrine, utilizing scraped data for investment research will only rarely result in insider trading liability. On the policy side, the arguments against policing any and all data protection violations with insider trading doctrine win out. Bringing the heavy hammer of insider trading down on investors relying on scraped data is ill-suited for likely policy goals, would disincentivize progressive thinkers as well as fossilize market dominance of data giants, and impair the free market equilibrium the U.S. economy is built on. [ABSTRACT FROM AUTHOR] |
