Insider Trading: A Modern Crime or Not?

Abstract

This paper follows the emerging challenge in the market, in the form of Insider trading. Even though being present for more than a few decades, the questions regarding the concept of Insider trading were once again thrown open as the case of Mr. Rajat Gupta came to its conclusion recently. We, after briefly stating out the basics about the concept of Insider Trading delve right into the laws that regulate it in India, and then followed by the laws in the United States and the United Kingdom respectively. Through this paper, we are particularly concentrating on the laws regulating the said menace in India. However, we do take the laws of USA and UK in consideration. This article aims to put light on the legal regime of USA, UK and India and tries to draw a comparative analysis between them because USA was the first jurisdiction to enact insider trading regulation and today it continues to lead the world in the regulation and enforcement, UK takes into consideration Directive of the European Parliament too that represent EC legal regime on insider dealing, India being the country whose statutory provisions on insider trading does not have a long history nevertheless amendments are being made to make this offence more punitive and preventive and only recently has enacted legislation prohibiting insider dealing.