"Huh?" Insider Trading: The Chris Collins Story

Abstract

On June 22, 2017, Representative Christopher Collins called his son from the lawn of the White House to share confidential information about a public company. In tipping off his son, Collins acted despite significant legal risk and a limited payoff.

This article attempts to make sense of Collins’ seemingly inexplicable behavior by turning to the work of criminologists to identify distinctive features of the crime of insider trading. First, James William Coleman’s research on what motivates white-collar criminals suggests that the absence of readily identifiable victims may contribute to the incidence of insider trading. Second, the work of Lawrence Cohen and Marcus Felson on the opportunity structure of crime suggests how the ease with which those in possession of material non-public information can trade facilitates insider trading.