The simple answer is that these are knowlege transfers are tacit.

It might happen involuntarilty by espionage or simple talkativeness of an insider.

It might happen due to tacit collusion between an insider towards an outsider who uses this information in some kind of e.g. financial transaction to buy or sell some assets which will move in the expected direction if the information is revealed to the public, e.g. a profit warning or a merger agreement. The insider might get a share from this insider trading revenue. Since no other parties are involved the financial regulator might only start an investigation if there is some evidence that something happening in a financial market is obviously irregular. As the Libor-scandal illustrates the detection of this manipulation by the financial market regulators stayed undetected for years. Sometimes only a whistleblower who knows about this illegal practices starts an investigation. May be the NSA or the GCHQ brwosing through the communication of bank employees find evidence which they foreward to the financial regulatory authority. Often tacit information is revealed in locations like pubs or restaurants when employees discuss on company issues openly whichout noticing a third party is watching them. However, this always is based on sime kind of accidental event which reveals this tacit insider activities.

I agree and want to add one more important factor here the lack of proper regulatory measure for the follow up of the disclosure requirement particularly more in an emerging economy.

Yes, it can be tackled and the control elements are linked to the individual psychology and trust rather that making them sign very binding confidentiality agreements, observe tough rules or encourage whistleblowers. Nowadays, anyway more than ever technology plays a key role and will continue to play a even stronger role.

I'd like to add, there really should be no fear of information transposed upon another and used literally as conduit for competition. If this evolutionary path evolves around realist perspective, than all it begets is more realist. The same can be true for neoliberal tacit, but what will be the end game. is it Dollar per Dollar or the value of the dollar when utilized. To fall back a little, what is the real objective of any trade? Is it a win-win or win-loss? In any case its the end game that matters, and one that dictates how these ought to be tackled.

Thanks Paul W for the game theory input. I subscribe to it, too!

Hi,

Perhaps you vcould benefitr from this paper:

P Cziraki, P de Goeij, L Renneboog, "Corporate governance rules and insider trading profits", Review of finance, 2014, 18, p 67 -108.

Best regards.

.

HI,

You may gain some insights with this paper:

D Aboody, B lev, "Information asymmetry, R&D and insider gains", Journazl of Finance, 2000, 55, N°6, 2747 -2752.

Best regards.