Although judicial lawmaking may contribute to uncertainty in the financial markets, Fisch argues that uncertainty in the context of insider trading may still be beneficial. A hardline rule, Fisch maintains, could potentially open the path to fraud by allowing backdoor loopholes to develop. Instead, judicial lawmaking deters that type of opportunistic behavior and is able to evolve with changing business practices.
via Applying Judge-Made Law to Insider Trading | The Regulatory Review.
