The Securities Appellate Tribunal last week passed an order on an insider trading case, in which it lays down some guidelines as to the scope of “price sensitive information” under the SEBI (Prohibition of Insider Trading) Regulations, 1992. The specific question pertains to whether “the decision taken by a listed investment company to dispose of a part of its investment is “price sensitive...
Insider Trading Laws in the U.S.: The Case Against Rajat Gupta
(The following post has been contributed by Karan Tyagi, who is an associate with Gide Loyrette Nouel in Paris. After obtaining his law degree from GLC (Mumbai), Karan went on to do his LL.M. from Harvard Law School last year. He can be contacted at [email protected]) Yesterday’s Financial Express has a piece authored by me on Rajat Gupta’s insider trading trial in the...
A Season For Insider Trading Probes
… in the U.S. (involving the hedge fund industry),
… as well as in India (involving certain large financial institutions and companies) arising out of the so-called loan scam.
The larger question is whether (and how) the investigations would be pursued to their logical conclusion resulting in effective enforcement of the regulations, which is never an easy task in the case of insider trading.
Insider Trading: Where Do We Draw the Line?
In an interesting two-part column series in the Mint (here and here), Govind Sankaranarayanan considers the broad academic debate surrounding insider trading. He makes at least two pertinent observations: (i) the line between insider trading that is considered acceptable and that which is improper is quite often blurred and difficult for regulators to segregate; and (ii) there is a need for...
Powers of SEBI and SEC Compared
In his column in the Business Standard this week, our guest contributor Somasekhar Sundaresan argues that, if one were to go by the rule book, SEBI has greater powers than the SEC. He lists out several significant powers of SEBI that can be exercised without intervention of the court. Here are some excerpts: Take the Raj Rajaratnam case itself. The SEC has had to file a complaint before a court...
The Insider Trading Debate Resurfaces
With the SEC recently charging hedge fund manager Raj Rajaratnam and others for insider trading, the debate regarding the scope of insider trading and its (un)desirability in capital markets has resurfaced. SEC’s complaint filed in the District Court in New York indicates that Rajaratnam, through his hedge fund Galleon, had traded in stocks of 10 different companies while in possession of inside...
Pyramid Saimira and the Powers of the SEBI
A few weeks ago, the SEBI passed an order (WTM/KMA/60/04/2009) in the Pyramid Saimira case, which raises questions pertaining to insider trading. The order resulted from SEBI’s investigation into the affairs of Pyramid Saimira, highlighted in this post. The particular sequence of events is discussed in several reports, linked here and here. In its order (though only an interim one), the SEBI...
Analysis of Recent SAT Rulings on Insider Trading and FUTP Against Dilip Pendse
(The following post is contributed by Bhushan Shah, an Indian lawyer currently pursuing a dual degree LL.M from New York University School of Law and National University of Singapore) The Securities Appellate Tribunal (‘SAT’ or ‘Tribunal’ ) recently set aside two orders (collectively referred as ‘Impugned Orders’ ) passed by market regulator i.e. Securities Exchange Board of India (‘SEBI’)...
INSIDER TRADING REGULATIONS – HIGHLIGHTS TO THE AMENDMENTS AND SOME POSERS
1) SEBI has amended the SEBI Prohibition of Insider Trading Regulations 1992 vide a notification dated 19th November 2008 which I briefly highlighted here. There are some far reaching amendments. 2) An important amendment is to the definition of “insider”. As I mentioned earlier, no word has been added or deleted but by dropping a comma and breaking the definition into two parts, a significant...
Difficulties in Insider Trading Actions
One usually tends to lament that the Indian securities regulator, SEBI, has been unsuccessful yet in its prosecution of insider trading cases. Several high profile cases were initiated by SEBI only to be overturned by the appellate authorities. This tends to be on account of the fact that insider trading cases are difficult to prove. A new case initiated by the Securities and Exchange Commission...
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