It has been argued by some, including Milton Friedman, that insider trading of publicly traded stocks should be allowed. The rationale is that trading stock with inside information can actually lead to trading based on more timely, accurate information about the financial health of companies. (

Those with inside information, in other words, would move the market toward a more efficient allocation of capital, more quickly, because insiders would know when to buy and sell at a price that reflects the true value of the stock based on a company's performance.

In an short explanation develop an criticism of this efficiency-based defense of insider trading; specifically, what reasons are there to reject this line of thinking?