Of course it is morally reprehensible. But is it against the law? SEC regulations don't apply to GLBSE assets (or any other form of bitcoin contracts for that matter). And even if you could take legal action, how would you prove it?
It is morally reprehensible, but IMHO you can't complain without holding some double standards. The concept of insider trading isn't applicable to an anonymous free market. Everyone involved made the informed decision to invest on the GLBSE instead of a regulated stock exchange. And those who draw on the benefits have to put up with the drawbacks. You can't pick and choose the best of two opposite worlds.
Last I heard assets with pirate exposure were still selling for 80% of face value. Anyone have an update?
24h average on the GLBSE is at ~50%.