TagInsider Trading

Categorization of Pledge Under SEBI’s Insider Trading Regulations, 1992: Arguments against the Tide

[Parth Dixit is a 4th Year, BA/LLB (Hons.) student at Symbiosis Law School, Pune.] By way of its order dated August 11, 2017 in the case of SRSR Holdings Private Limited v. Securities and Exchange Board of India, the Securities Appellate Tribunal (SAT) has provided a degree of finality to an important question raised in the aftermath of the infamous Satyam scam of 2009-2010. The question was...

SAT Order in the Satyam Case

In July 2014, we had discussed the order of the Securities and Exchange Board of India (SEBI) then passed against several members of Satyam’s senior management for their role in perpetrating the colossal financial fraud involving the company. In its order, SEBI found several individuals guilty of violating various regulations issued by SEBI, and restrained them from accessing the capital markets...

SEBI Informal Guidance: Trading Disclosures – What’s the “Value”?

[The following post is contributed by Yogesh Chande, Partner, Shardul Amarchand Mangaldas & Co. Advocates and Solicitors. Views are personal.] The SEBI (Prohibition of Insider Trading) Regulations, 2015 (the “PIT Regulations”) prescribe certain disclosure norms relating to acquisitions and disposals of securities by insiders in companies. Specifically, regulation 7(2)(a) states that where...

SEBI’s Interference in a Compliance Officer’s Decision under Insider Trading Regulations – A Recent Informal Guidance

[Guest post by Suvan Law Advisors, a law firm specializing in regulatory laws. They can be reached at info@suvanlaw.com. Disclosure: Partners of Suvan Law Advisors contributories to Justice Sodhi Committee Report on Insider Trading.] SEBI has issued a ‘path-breaking’ Informal Guidance dated February 3, 2017 to Kirloskar Chillers Private...

US Supreme Court Clarifies Tippee Liability in Insider Trading

The law on insider trading has received considerable attention in the United States (US) in recent years. At the same time, the law in the US is quite narrow compared to most other jurisdictions because liability for insider trading arises only if the person trading owes a fiduciary duty to the company and its shareholders, which has subsequently been extended to a duty owed to the source of the...

Discretionary Portfolio Management and Insider Trading

The concept of discretionary portfolio management (“DPM”) is one whereby a portfolio manager makes investments on behalf of a client. The decisions regarding which investments must be made, and on what terms, are left to the portfolio manager. The client neither influences the decision-making of the portfolio manager nor does the client get involved in day-to-day investment decisions. Request and...

Due Diligence in Corporate Transactions and Insider Trading Laws

In corporate transactions involving shares of listed companies, the ability to conduct a detailed due diligence is constrained by laws that regulate insider trading. In a paper titled “Due Diligence in Share Acquisitions: Navigating the Insider Trading Regime”, I seek to examine this issue in detail. The abstract of the paper is as follows: The goal of this paper is to unpack the underlying...

SEBI takes into account social media connection of parties in insider trading case

This order of SEBI is otherwise just another case where parties were found to have allegedly profited from insider trading. The only noteworthy point is that the connection between two of the parties was detected because they had common friends on social media. To my recollection, this is perhaps the first case where SEBI investigated the social media profile of the parties. The Hon’ble...

Presumption in Insider Trading

Given the evidentiary problems in insider trading cases, SEBI has resorted to the use of presumptions in its enforcement of the SEBI (Prohibition of Insider Trading) Regulations, 1992. Some of the issues that arose due to this approach have been discussed in the past. These issues have resurfaced more recently in a short order of the Securities Appellate Tribunal (SAT) in the case of Reliance...

Disclosures under Non-Disclosure Agreements?

[The following guest post is contributed by Yogesh Chande and Malek-ul-Ashtar Shipchandler of Shardul Amarchand Mangaldas. Views expressed herein are personal and solely that of the authors.] A recent post titled “Confidentiality Agreements in M&A Transactions” (available here) discussed confidentiality agreements in the context of a US based M&A transaction. From a view point of insider...

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