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James Altucher Is "Horribly Naive"! Legalizing Insider Trading Would "Create a Monster"

Posted Nov 05, 2009 07:30am EST by Peter Gorenstein in Investing
Related: intc, qqqq, dia, spy, hpq, ^DJI, ^GSPC

Galleon Group founder Raj Rajaratnam – the man accused of the largest insider trading scam in a generation – heads to court later today for a hearing on his request to lower his $100 million bail.

Last week, James Altucher made quite a fuss, when he appeared on Tech Ticker claiming Rajaratnam is alleged of something that shouldn't even be crime.

Jeff Matthews, founding partner of the hedge fund Ram Partners, couldn't disagree more. "If we were to allow insiders to control and profit from insider information I think you create a monster," he proclaims.

In case you missed it, Altucher claims that, "if insiders, the ones with privileged information, are throwing that information into the stock price everyone benefits with a more accurate price."

Matthews scoffs at that notion. "Its like the theory that credit default swaps and derivatives were going to make the market safer," he says. Hundreds of billion dollars in bailouts later, we all know, sometimes a theory simply doesn't deliver in the real world.

Go to Tech Ticker

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