Charlie Gasparino has a new book out exploring the government’s prolonged crackdown on insider trading groups. Gasparino is a self professed critic of the crackdowns, not condoning insider trading but not agreeing that it’s where resources should be spent.

Charlie Gasparino

Circle of Friends: The Massive Federal Crackdown on Insider Trading—and Why the Markets Always Work Against the Little Guy, looks at how insider trading networks work, and how Federal regulators have tried to stop them. It’s an interesting book from a critic of the run on insider trading.

According to an interview with the man himself in Businessweek, “I think if I didn’t point out that we went after this crime rather than the crime that nearly destroyed the financial economy, I wouldn’t be doing my job.” For Gasparino it’s not that insider trading isn’t bad, it’s that worse behavior is being overlooked, and that’s a problem.

Gasparino Revealed Stephen A. Cohen

Gasparino was one of the reporters that originally brought SAC Capital and Stephen A. Cohen to the attention of a wider audience. Asked about that investigation in the Businessweek piece, Gasparino says that the reports that came out of that investigation didn’t allege insider trading at all. They simply pointed out what a behemoth of information-gathering SAC Capital was.

The fund certainly was excellent at collecting information, though that habit led directly to an investigation by the SEC and the firm’s current legal problems. Though Gasparino isn’t certain exactly what the SEC intends to do with the top guys at SAC, and Stephen Cohen himself, he’s sure that the firm’s business is essentially ruined.

Insider Trading Isn’t the Worst Ahead

Trading runs on information, and when traders can afford information others can’t, they’ll do their best to get ahold of it. The criminals in Gasparino’s book went too far and obtained illegal information. The book takes a look at the push and pull of regulations.

The ongoing pursuit of those involved in insider trading may change the way that markets work. It may stop traders and firms seeking out this kind of information. Even if it does, however, Gasparino is right—insider trading did not bring the economy to its knees in 2008. Perhaps the SEC should be looking for those that did.