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47778826 Insider Trading

47778826 Insider Trading

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Published by Sravan Erukulla

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Published by: Sravan Erukulla on Feb 15, 2013
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02/15/2013

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 INSIDER TRADING-The HLL Case
Submitted by,Anuradha Mohanta(u109055)B. Mayuri(u109060)Ekta Aggarwal(u109065)Manisha Tripathy(u109073)Varsha Agrawal(u109098)
 
INSIDER TRADING
Insider trading
is a term that most investors have heard and usuallyassociate with illegal conduct
But the term actually includes both legal and illegal conduct
The legal version is when corporate insiders officers, directors, andemployees buy and sell stock in their own companies
When corporate insiders trade in their own securities, they must reporttheir trades to the SEBI.
Illegal insider trading refers generally to buying or selling a security, inbreach of a fiduciary duty or other relationship of trust and confidence,while in possession of material, non public information about the security
 
Price sensitive information includes periodical financial results of acompany, intended declaration of dividend, issue or buyback of securities, any major expansion plans or execution of new projects,amalgamation, merger, takeovers, disposal of the whole orsubstantial part of the undertaking and any other significant changesin policies, plans or operations of the company.
How does Insider trading work?
An insider buys the stock (he might also already own it). He thenreleases price-sensitive information to a small group of people closeto him, who buy the stock based on it, and spread the informationfurther. This results in an increase in volumes and prices of the stock.The inside information has now become known to a larger group of people which further pushes up volumes and prices of the stock.
 

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