Insider Trading Challenges in the Digital Era: Legal and Ethical Considerations for U.S. Financial Market Regulation

Abstract

Digital technologies have profoundly transformed financial markets, introducing both opportunities and challenges for regulatory frameworks. This paper critically explores the complexities of regulating insider trading in the U.S. financial markets, focusing on emerging technologies such as blockchain, smart contracts, and artificial intelligence. While these innovations promise enhanced transparency and efficiency, they simultaneously obscure accountability, complicate enforcement, and expand the interpretative scope of insider trading laws. The transition to decentralized platforms and automated trading systems has disrupted jurisdictional boundaries and amplified regulatory gaps. This study examines these disruptions through the lens of key legal principles and case law, highlighting the urgent need for adaptive legal reforms to maintain market integrity in the digital age.