Companies have non public information and therefore can more accurately price the value of their stocks relative to the market than investors can. This may not apply in the long term, but insider trading is illegal due to this information asymmetry.
In the extreme case of a disclosure that will tank the stock price their current investors would be better if the company sold new shares ahead of that announcement. This would then dilute the loss across more investors. Though the ethical issues should be obvious.
Buybacks are simply the opposite of issuing new stock which happens to have tax advantages.
Out of curiosity... are stock buybacks subject to any kind of insider trading rules? I'd imagine that they'd be needed if the executives own stock in the company (or whose compensation is otherwise tied to the performance of the stock).
There are separate rules, but they operate in the opposite direction. The SEC rules give a safe harbor, a type of immunity for enforcement actions for share price manipulation, to firms whose insiders sell when a buyback is announced.
In the extreme case of a disclosure that will tank the stock price their current investors would be better if the company sold new shares ahead of that announcement. This would then dilute the loss across more investors. Though the ethical issues should be obvious.
Buybacks are simply the opposite of issuing new stock which happens to have tax advantages.