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All India PT Mock Test 2025 (OMR Based)
12th April 2025 (11 Topics)

Insider Trading

Context

US President Trump is facing insider trading allegations, an unprecedented development in US history, raising serious legal and ethical concerns.

What is insider trading?

  • Insider tradingoccurs when someone with a vested interest in a company uses non-public information to make a trading decision.
    • Insider tradingusually involves company executives or employees leveraging confidential company information to gain an advantage in the stock market.
    • On the other hand, front-running typically involves brokers or fund managersexploiting knowledge of their clients' upcoming trades.
  • In India, insider trading is prohibited under the SEBI Act, 1992.SEBI has established the SEBI (Prohibition of Insider Trading) Regulations, 2015, which outline the rules for prohibiting and restricting insider trading.
  • These practices undermine investor confidencein the fairness and transparency of financial markets.
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