Volume 44, Issue 1, Spring 2025
Constanza Guajardo

Pages 1-26
https://doi.org/10.5840/bpej2025529166
Can Stakeholder Theory Adequately Address the Ethics of Insider Trading?
Insider trading refers to the practice of buying or selling assets on the basis of information that is not public. This paper asks if stakeholder theory can adequately address the ethics of insider trading. It argues that this practice involves two types of unfairness between insiders and society. First, an unfair allocation of benefits and burdens. Second, insiders obtain an additional benefit, that cannot be justified to others, from their privileged position. The paper argues that stakeholder theory is superior to shareholder primacy, since it considers these obligations of fairness of insiders with society. However, stakeholder theory also has weaknesses; it ignores both the legal dimension of insider trading and cases that involve politicians, central bankers, the partner of insiders, among others. The paper concludes that responsibility models in business ethics cannot address the whole moral wrong of insider trading, and hence, they should be complemented with models of responsibility in political theory.