I can't tell you why any non-violent crime warrants a custodial sentence. It seems like civil penalties really ought to be enough deterrent and a much better recompense to society.
Who is the victim?
The person who bought the stock you knew was worthless or sold you the stock you knew was gold.
Why is insider trading a crime?
It's an unmanageable market advantage, if we didn't disallow it then people wouldn't play. The people who make the rules benefit from people playing.
It pretty much undermines the fairness of the entire market. If insider trading wasn’t a crime, the single goal of every investor would not be to find investable companies but to find insider information.
The stock market would cease to be an effective tool for raising capital.
It would be more akin to the crypto market where there are no such rules about insider trading and everything is pumped and dumped via influencers and degens acting on insider tips.
Who is the victim?
The person who bought the stock you knew was worthless or sold you the stock you knew was gold.
Why is insider trading a crime?
It's an unmanageable market advantage, if we didn't disallow it then people wouldn't play. The people who make the rules benefit from people playing.