Insider Trading

“It’s a straightforward announcement that the Southern District is still in the insider trading prosecution business,” Daniel Richman, a former federal prosecutor, who is now a professor at Columbia Law School told the New York Times when Billy Walters was recently indicted.

Business, hardly, someone should let the Securities Exchange Commission and the FBI in on the obvious: “knowing more than the other guy is what free market capitalism is all about,” Murray Rothbard told the 1989 Michigan Libertarian Party Convention. “Insider trading laws are a direct assault on free markets, free enterprise, private property and all the rest of it.”

In his speech Murray was disappointed that libertarians weren’t paying much attention to the issue and his least favorite politician, U.S. Attorney Rudy Giuliani was the “scourge of Wall Street” at the time locking up anyone he could for insider trading on his way to the mayor’s office.Titan Sports Fund spokesman Dennis Tobler, with 40 years’ experience in the sports betting industry, bragged to Casino Player about the fund’s proprietary software as a key in its claim to reap profits betting with Nevada bookmakers.

However, Tobler insists on keeping his investors in the dark on game days. “I’m interested in dealing with clients who focus on ROI [return on investment]. The fund’s primary responsibility is delivering profits to its clients. Adequate information will be provided in the fund’s quarterly reports,” claims Tobler.

So you have your algorithms and fancy software, but where does the professional gambler get his or her edge?  In the just released movie “The Best of It” a dark look at professional sports betting, legendary Vegas sharpie Lem Banker tells the story of his biggest win. On a certain boxing match he heard one of the fighters had a cut in his mouth. Banker bet on the other guy and even got word to the winner’s corner to keep punching to the mouth.

While it sounds different, there is no difference in knowing about a cut and knowing a thousand tendencies a boxer, athlete, or team may have, giving that gambler an edge over his competition.

Will Messrs. Bharara and Ceresney insist on calling this all insider trading? When it should be as Rothbard named it, free market capitalism.

As for Mr. Walters, the smart money has always been on him.

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