Why is insider trading bad. doesnt it actually help the alleged victim. for example mr. buyer wants to buy shares of msft. bill gates knows that msft is going to have a horrible earnings anouncement, so he sells his shares, which will add to the supply and bring down the price. Mr. Buyer then buys shares of msft at the lower price. without the insider trading, mr. buyer would have been buying into a market with less supply. anyone understand? same works for positive news. sellers sell into more demand.