Investors rightly prize clever managers. But they should rethink that when such cleverness extends to trading in the company’s shares.

Chief executives and other top managers count as corporate insiders, routinely holding private information that could move their firms' stock. They aren't allowed to trade on that, and the Securities and Exchange Commission has put in a variety of measures aimed at making it more difficult. Insiders must report a trade within two days of the end of the month the trade occurred, for example. And they are blocked from trading in and out of their firms' stock for a quick profit.