Bhavesh Vashisht, Maharashtra National Law University Aurangabad
INTRODUCTION
Trading in bonds, shares, derivatives, and other instruments continues to grow at a rapid rate as the corporate sector expands in worldwide markets. Insider trading is a type of trade that has gotten a lot of attention in recent years. It occurs when a person having possible access to non- public knowledge about a company buys or sells the business's shares or stocks. Insider trading is a term that has been more popular in the financial markets during the last two to three decades. Trading that does not make use of non-public information, on the other hand, is frequently permitted.
In a nutshell, it refers to a fraudulent activity used by the majority of firm entities that are listed on a recognized stock market. Insider trading is a global phenomenon that requires immediate attention and regulation and if left uncontrolled, it would exacerbate several issues, particularly economic issues such as widening of the wealth gap, stock market collapses, and economic downturns. It is a bad practice since the affluent become wealthy and the poor get poorer, which is bad for any economy.
Insider trading has been identified as the most difficult problem to solve, owing to the lack of circumstantial evidence that is required by law to bring criminals to justice. Insider trading is a complicated issue that is very hard to eradicate since it stems from a very basic human instinct which is greed. It is exceedingly difficult for someone who has insider knowledge and uses it to make a future profit or reduce a loss by discounting that knowledge to stay away from trading based on that knowledge.
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