Though I appreciate and applaud the primary sentiment espoused in this post, I most emphatically disagree with the statement, "Okay, dumping the stock was wrong."

When you make such a statement, you concede the moral high ground to the anti-civs (as in anti-civilization which I find to be a better description for these cretins than leftists). The entire premise of the insider trading law is egalitarian. It attempts to force, as a matter of law, a reality where all individuals will always have the same information at the same time. Since this is impossible, it means that the enforcement of the law will, by necessity, be arbitrary, not objective.

Since there is no rational principle guiding the law, in any given situation an individual can have no rational way of knowing whether his acting on his information will be construed as a violation of the insider trading law.

But this is NOT the only thing wrong with this. If a man is truly to be free, he must have the ability to act on the convictions of his own mind. When the government steps in, (as the FDA is doing to ImClone), to hold up and then ban the sale of ImClone's drug Erbitux, it immorally violates the rights of every stockholder to the use and disposal of the property they jointly created.

So after immorrally preventing Erbitux from coming to market, thus devaluing all of the effort and capital that had gone into producing it, the government THEN steps in and immorrally invalidates the free trade of Mr. Waksal's stock to another individual who wished to buy it at an agreed upon price. If an individual is free; if he truly has rights, then so long as he does not act fraudulently, he must have the right to trade the fruits of his labor in any way his mind deems proper. Any interference with this process is anti-life and vicious.

Finally after grievously wronging Mr. Waksal twice, the government compounds its sins by denying Mr. Waksal his freedom for seven years.

There are so many things wrong and downright evil about this whole case, it almost makes me ill, so please don't give it one ounce of legitimacy by claiming that Mr. Waksal did something wrong by selling his stock to another individual who willingly wished to buy it at a price that was acceptable to each of them.

Excellent point and I would be the first to vote to rescind insider trading laws. It is simple market information and market efficiency requires all information.

But if it is illegal, than the buyer of the stock has the expectation that the seller does not have supra-material information. We must abide by the laws we disapprove. (And I don't think the good doc was selling as a matter of protest.)

It doesn't matter if the seller of a stock has supra-material information. Others sold the stock that day, and a buyer could find shares for sale even if Waksal did not sell. Insider trading laws are supposedly designed to prevent insiders from manipulating stock values and profiting on the changes they induce. The only manipulation of the stock value in this case was by an abusive regulatory agency of the government wielding its "protective" power in an immoral way.

Ayn Rand said, "Unjust laws have to be fought ideologically; they cannot be fought or corrected by means of mere disobedience and futile martyrdom." Waksal intended neither of these. He simply wanted to avoid a personal financial loss resulting from a punitive government act, and has become a martyr in the process. I think Russ is saying that in order to fight this unjust law ideologically, as we are doing through this blog, one must not surrender the moral high ground that justified Waksal's actions: an individual's right to self-defense and private property ownership.

Larry Elder has an interview today with Henry Manne who thinks insider trading should be legalized.

John Galt-

It is a little more complicated than you are making it out to be.

You can go to the archives of the Yahoo IMCL message board and see how many of us IMCL shareholders were agonizing over whether to dump some stock based on the price action, only to hold off because Sam and Harlan Waksal continually stated they hadn't heard from the FDA and still expected the drug to be approved. Meanwhile, they and their friends were unloading their shares because of the leak.

This wasn't an insider that just "heard" something. He propped up the price with his actions and statements while he was getting everyone he knew out, then the bottom dropped out on us naive enough to trust the system.

Sorry, I didn't see that you already blogged about Larry Elder's interview.