The article explores insider trading laws in the US and Taiwan, focusing on the balance between market efficiency and investor protection. It examines how courts differentiate between illegal insider trading and lawful informed trading. The study also compares the approaches of the US and Taiwan in dealing with insider trading, using a comparative methodology. Additionally, it introduces an empirical method to evaluate the effectiveness of insider trading enforcement. The research aims to shed light on the complexities of insider trading regulations and their impact on financial markets.