The rise of exchange-traded funds (ETF) has introduced more investing opportunities and trading flexibility for investors since its creation. However, it's also allowed for new ways of insider trading while evading detection by regulators and even avoiding prosecution altogether.
The Globe and Mail reported that a new study has found that "financial wrongdoers" have been using ETFs to profit from information that has not yet been made public.
"Proving cause and effect gets really tricky," said partner and co-head of Torys' Capital Markets practice Rima Ramchandani when speaking with The Globe.
To help combat the challenges of policing insider trading, Rima explained that it is important to ensure information symmetry.
"Everyone should have access to the same information to ensure the integrity of the markets," she added.
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