Somewhere in Canary Wharf a chap in a three button single breasted Boss suit whispers to a colleague, wearing a double breasted Armani suit. "I say, I was having a drink at lunch with old Pongo. He said he knows someone who works as an accountant at HBOSH who told him that HBOSH is bust."
Armani suited chap says, "If HBOSH is bust then their shares will fall and we can sell short and clean up".
And that is just what three button single breasted Boss suit chap and double breasted Armani chap did.
These two chaps acted on inside information to trade in shares.
Unofficial information has to start somewhere. Any information about a company that is not a public announcement has to come from people either inside the company or from their associated advisors. That makes it inside information and trading on inside information is illegal.
What is the legality of acting on information you thought was inside information but was just a load of cockamamie airy fairy fantasy? Can Armani suited chap be prosecuted for insider trading?
And what is to be done with the whole rotten edifice of parasitic financial trading?
Sure, in a capitalist system there is a place for raising funds for worthwhile, and not so worthwhile, enterprises. But most trading is just a parasitic activity that benefits no-one bar the traders involved.