Understanding & Conceptualizing Insider Trading Laws of India & US

Abstract

Insider trading revolves around acts of trading securities, including stocks, bonds, and stock options on the basis of the information that is not available for the public yet. Examples of insider trading include purchasing a large amount of shares in the same company by a senior executive after getting the news of stock price up before the information goes public. Primarily, it is a malpractice and criminal offense as this act is considered as unfair to the investors without having the inside information of a company. However, it is quite different from any general investment fraud as it does not make any individual investors its prey. It is all about exploiting the available information to gain unfair advantages in the case of investments. Hence, regulations and federal statutes are active in countries to prosecute and investigate such offenses regarding securities fraud. In this case, the research paper dwells on the insider trading laws and regulations in India and the US in a comparative tone.