<<There could be indirect harm to specific shareholders>>
There is direct harm to the Company. The tax benefit to the insider -- that his income inclusion is based on the fair market value of the stock on the date of exercise and such value is lower than what he expects it to be in the future based on the inside information -- is a tax detriment to the Company. That is, the insider's inclusion is a tax deduction for the Company, and the benefit to one is equal to the detriment to the other. Indeed, the Company lost benefit is larger, because for the insider what is at stake is really the difference between ordinary income and capital gain and timing, and for the Company, it is a loss of a tax deduction against ordinary income.
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