If you actually weakened insider trading laws, companies would probably end up being more honest and revealing more secrets.
March 26, 2026
Original Paper
The Effect of Insider Trading Law on Firms' Innovation Disclosures 
SSRN · 6347638
The Takeaway
When a 2014 court ruling made it harder to prosecute insider trading, companies responded by flooding the public with more detailed patent disclosures. Firms did this to eliminate the 'information advantage' their own employees held, effectively using transparency as a defense mechanism to prevent insiders from profiting off private knowledge.
From the abstract
We examine whether insider trading law affects firms' innovation disclosures. Our setting exploits United States v. Newman, a 2014 circuit court decision that made it more difficult for prosecutors to establish insider trading liability in some U.S. states. Using a difference-indifferences design, we find that firms headquartered in states affected by the decision increase their patenting rates and reduce their reliance on trade secrecy after the ruling. Patent disclosures also become more detai