Insider Trading

Insider trading refers to the buying or selling of securities (such as stocks or bonds) by individuals
who have access to non-public information about the company. This information can significantly
impact the price of the securities once it becomes public. Insider trading is considered illegal in most
jurisdictions because it undermines the fairness and integrity of financial markets.

Unpublished Price Sensitive Information (UPSI)

Unpublished Price Sensitive Information (UPSI) refers to any information that has not been made
available to the general public and, if disclosed, would likely have a material impact on the price of
the securities of a company. UPSI can include financial results, mergers and acquisitions, regulatory
approvals, significant contracts, or any other information that can affect the investment decisions of
market participants.

Provisions to Prevent Insider Trading in India

In India, insider trading is primarily regulated by the Securities and Exchange Board of India (SEBI)
under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
These regulations aim to prevent insider trading and maintain the integrity of the securities market.
Some key provisions to prevent insider trading in India include:

1. Prohibition on communication or procurement of UPSI: No person is allowed to communicate,

provide, or procure UPSI, except in the necessary course of business, profession, or employment.

2. Code of Fair Disclosure: Companies are required to formulate a Code of Fair Disclosure, which lays
down procedures for the fair disclosure of UPSI. This code ensures that all investors have equal
access to information.

3. Trading when in possession of UPSI: Insiders are prohibited from trading in securities when they
are in possession of UPSI. Trading is only allowed after the UPSI becomes generally available to the
public.
Insider Trading Major Cases

1. Albert H. Wiggin: In 1929, Albert H. Wiggin, the president of Chase National Bank, sold his own
shares in the bank before the stock market crash. His actions, although not illegal at the time, drew
public outrage and led to regulatory changes.

2. Ivan Boesky: Ivan Boesky was a prominent Wall Street financier in the 1980s. He was involved in
various insider trading schemes, which eventually led to his downfall and a significant crackdown on
insider trading by the U.S. government.

3. R. Foster Winans: Winans was a journalist at The Wall Street Journal who leaked advance
information about the "Heard on the Street" column, allowing others to profit from it. He was
prosecuted and convicted for insider trading in 1985.

4. Martha Stewart and ImClone: Martha Stewart, a well-known American businesswoman and
television personality, was convicted of insider trading in 2004. She sold her shares in ImClone
Systems after receiving insider information about negative news that would impact the company's
stock price.

Indian Cases of Insider Trading

1. Titan Company Ltd Insider Trading Case: In 2019, SEBI imposed penalties on various individuals
and entities, including the managing director of Titan Company Ltd, for insider trading. They were
found to have traded in the company's shares based on unpublished price-sensitive information.

2. Aptech Insider Trading Case: In 2020, SEBI levied fines on multiple entities, including the former
chairman and managing director of Aptech Ltd, for insider trading. The case involved trading in the
shares of Aptech based on unpublished price-sensitive information.

3. PVR Case: In 2021, SEBI conducted an investigation into alleged insider trading in the shares of
PVR Ltd. The investigation focused on certain individuals who were suspected of trading based on
unpublished price-sensitive information related to the company.

CONCLUSION
These are just a few examples of insider trading cases, both in the international arena and in India.
Insider trading cases highlight the importance of regulatory oversight and enforcement to ensure
fair and transparent markets.