Why Is the Strong Form of the Efficient Market Hypothesis Largely Considered to Be False?

The strong form of the EMH is considered false because of the documented existence of insider trading profits. This form of the hypothesis claims that even private, non-public information is already reflected in stock prices.

However, numerous legal cases and market data show that individuals with access to inside information can and do achieve abnormal returns by trading on it before it becomes public. The very existence of laws against insider trading is a testament to the fact that such information can be highly profitable, which contradicts the strong-form EMH.