ANOTHER lurid case of insider trading has been uncovered: The former chairman of Dean Foods has admitted giving insider information to a well-known professional sports bettor in Las Vegas because he was mired in gambling debts. The sports bettor made an estimated $43 million over five years from this information, according to federal prosecutors. A second beneficiary of stock tips was the professional golfer Phil Mickelson, who had gambling debts of his own.

The prosecutors and the Securities and Exchange Commission deserve credit, but it’s a mixed victory: Neither the United States attorney nor the S.E.C. is prosecuting other people who benefited from the stock tips, including Mr. Mickelson. Why not? A serious shortfall in our law has hampered prosecutors and allowed insider traders — particularly those further down the chain of information — to dance around the rules.

Our insider trading law has become overly complex and burdensome for two reasons. First, neither Congress nor the S.E.C. has ever defined “insider trading” in a comprehensive way. So our laws are largely made by judges who, bound by precedent, rarely update law to fit new circumstances.

Second, our laws seek to balance different goals. The United States (unlike some other nations) does not adopt a simple “parity of information” approach under which one cannot trade on material facts that are not publicly available. United States law also values market efficiency: We want to encourage people to seek new information about companies through legitimate research. So the law basically prohibits trading on nonpublic information only when it has been wrongfully obtained or used.