Accepting the argument made by Manne, Epstein and others that firms wishing to allow their employees to insider trade should be permitted to do so, this article shows that there is still a crucial role for government in regulating insider trading. In particular, allowing employees to profit by insider trading is a form of employee compensation that, in contradistinction from conventional forms of equity compensation, results in unknowable and effectively unlimited costs to the company. Since providing employee compensation in this form causes the company to lose control of its compensation expense, even if insider trading were legal, virtually every company would rely on conventional forms of employee compensation and prohibit its employees from insider trading. But, pace Manne, Epstein and others, companies lack the means to detect insider trading by their employees, and even when they do catch employees insider trading, companies can impose only mild contractual sanctions, generally not exceeding disgorgement of profits and dismissal. As a result, although an efficient agreement between a company and its employee would prohibit the employee from insider trading, this prohibition cannot be effectively enforced by the company. Government, with its usual law enforcement powers, is better able to detect insider trading and can impose more severe sanctions on violators, including criminal penalties. Government should thus enforce a ban on insider trading in those instances, which will be virtually all instances, in which a company prohibits its employees from insider trading. The efficient solution is thus a hybrid system of private prohibition and public enforcement. Such a system is not unusual but the norm. Employers prohibit employees from embezzling their money and stealing their property, and employees are subject to contractual sanctions and dismissal for violating these prohibitions, but we still need statutes against theft to generate an optimal level of deterrence. This is all the more true when the employee misappropriates information, which is much harder to detect than a theft of money or property.

接受Manne，Epstein和其他人的论点，即允许公司希望允许其雇员进行内幕交易的论点，这篇文章表明，政府在规范内幕交易方面仍然起着至关重要的作用。特别是，允许​​员工通过内幕交易获利是一种员工补偿，与传统形式的股权补偿相反，这导致公司的费用不可知且实际上是无限的。由于以这种形式提供雇员补偿会导致公司失去对其补偿费用的控制，即使内幕交易是合法的，实际上每个公司都将依靠常规形式的雇员报酬并禁止其雇员进行内幕交易。但是，步伐曼恩，爱泼斯坦和其他公司缺乏对员工进行内幕交易进行检测的手段，即使他们确实抓住了员工内幕交易，公司也只能实施温和的合同制裁，通常不超过对利润的剥夺和解雇。结果，尽管公司与雇员之间的有效协议将禁止雇员进行内幕交易，但该禁令不能由公司有效执行。政府凭借其通常的执法权，能够更好地发现内幕交易，并且可以对违法者施加更严厉的制裁，包括刑事处罚。因此，政府应在这些情况下强制执行内幕交易禁令，这实际上是所有公司禁止其雇员进行内幕交易的情况。因此，有效的解决方案是私人禁止和公共执法的混合系统。这样的系统并非罕见，而是规范。雇主禁止员工贪污钱财和窃取财产，并且由于违反这些禁令而受到合同制裁和解雇，但我们仍然需要制定防止盗窃的法律，以产生最佳的威慑力。当员工盗用信息时，情况更是如此，这比盗窃金钱或财产更难发现。但是我们仍然需要针对盗窃的法规，以产生最佳的威慑水平。当员工盗用信息时，情况更是如此，这比盗窃金钱或财产更难发现。但是我们仍然需要针对盗窃的法规，以产生最佳的威慑水平。当员工盗用信息时，情况更是如此，这比盗窃金钱或财产更难发现。