Insider Trading and India
Symbiosis Law School, Pune, India
Volume II – Issue II, 2021
Insider Trading is essentially the trading of stocks and securities of a public company by an employee of such company or a member of such organization having access to private information about the company. Such private information could prove to be so vital potentially because it has an impact on the investment decisions of the company. Insider Trading is an act of reaping increased profits because of access to a certain piece of information that is not in the public domain and therefore not known to other investors by virtue of work affiliation of such person trading company’s securities in the stock market.Insider trading creates an unlevel playing field where those key executives having access to strategic information about the company and acting on such information would win the battle of the stock exchange at the expense of the general public and other investors. Commonly discouraged throughout the world, the practice of Insider Trading is prohibited by SEBI (Security Exchange Board of India) to promote the benefit of the general investor, creation of a level playing field, and promoting fair trading practices in the stock exchange market.