Insider Trading | 09 May 2025

Source: IE 

The Securities and Exchange Board of India (SEBI) has alleged the nephew of the billionaire Gautam Adani, shared unpublished price sensitive information and breached regulations aimed at preventing insider trading. 

• About Insider Trading: Insider trading refers to the illegal practice of buying or selling a publicly traded company’s stock or securities based on material, non-public information (MNPI) about the company.  
  • It gives the trader an unfair advantage over other investors and undermines market fairness. 
  • An insider can include company executives, directors, employees with access to confidential data (impacts stock prices), their relatives or associates, and professionals such as lawyers, bankers, or auditors working with the company. 
• In India, insider trading is prohibited under the SEBI Act, 1992, and regulated by the SEBI (Prohibition of Insider Trading) Regulations, 2015, which set the rules for prohibiting and restricting insider trading. 
• Front-running is an illegal practice where traders or brokers use advance knowledge of pending client trades to profit from expected price movements.  
  • Unlike insider trading, it exploits knowledge of large orders rather than non-public company information.  
  • Both practices are prohibited under SEBI regulations in India.