The Nuances Of Insider Trading

The Insider trading  has become a novel way to cheat the public.  It is the trading of a public stock company by individuals with access to non-public information about the company.It is mostly associated with  the illegal conduct.

It is legal when the directors, employees, and officers trade stock of their own company, Illegal trading refers to buy and sell a security in breach of fiduciary duty or other relationship of trust or confidence, while in possession of material non-public information about the security.

This happens in many a corporate trading of securities. The insiders  give a tip of the corporates developments. They trade and share it with their friends and relatives. Law, banking, and brokerage firms trade with the leaked information  Government employees have access to the insider information and they trade. To a certain level, misappropriation also finds its way.

With the knowledge  received from the insiders many prosperous investors made huge sum of money during the IPO's and corporate mergers. This type of trading undermines investors confidence
thwarting the fairness and the integrity o the security.


Many have taken advantage of the tips  and amassed huge wealth. It is a gross violation.

The Insider Trading --Latest Addition

A few days ago, read in the newspapers that A. Vellayan  Of Murugappa group faces charges framed by SEBI in an insider trading case related to the acquisition of Sabero Organics by Coromandel International in 2011.

Not one industrialist is out of corruption. The Murugappa group boasts of integrity and decorum as its principles of governance.It has also fallen prey to greed. The SEBI, whole time Director wrote in his order that Vellayan in all possibilities shared unpublished price sensitive information about the impending acquisition of Sabero transaction. He had disclosed this valuable information to his distant relatives AR. Murugappan and V. Karuppiah and one another C. Gopalakrishnan, when this idea took shape.

Vellayan if proved is not the only person in Corporate India who has manipulated and made billions. Vellayan is going to take it up legally and as a measure has stepped aside as Murugappa Group Chief.

The insider trading is an offence that goes unchecked everywhere. The profits generated  thus are a whopping billion or more at the minimum. The trader in stocks does his homework with diligence and makes a profit not any way worthy of this phenomenal transaction of insider trading. Many corporate giants in India do, play safely and make huge profits. If Vellayan is found guilty and convicted, then I feel SEBI has taken a decision.


Let we wait for the development of the

case .