No–legalising insider trading would destroy the market, because anybody not in a position to have insider knowledge would be at a severe disadvantage so as to make the expected return of investing negative.
An analogy: It'd be like playing online chess for money, without any way to stop your opponent from using a computer to make their moves. Or like the Olympics where some people are allowed to use performance enhancing drugs.
After a very short time, most everyone will have left the market.
There's also no more reason to legalise insider trading than murder or burglary. The prevalence is very likely to be at an all-time low currently, because the statistical methods used to spot insider trading in market data have improved dramatically. Some quant funds also flag suspicious trades as a sort of by-product of their work and share that data with the authorities.
An analogy: It'd be like playing online chess for money, without any way to stop your opponent from using a computer to make their moves. Or like the Olympics where some people are allowed to use performance enhancing drugs.
After a very short time, most everyone will have left the market.
There's also no more reason to legalise insider trading than murder or burglary. The prevalence is very likely to be at an all-time low currently, because the statistical methods used to spot insider trading in market data have improved dramatically. Some quant funds also flag suspicious trades as a sort of by-product of their work and share that data with the authorities.