What is insider trading all about?

1. INSIDER TRADING

2. ➢ Trading of a public company's stock or other securities by an
individual with access to nonpublic information about the
company
➢Form of misuse of official position of an individual in
organization
➢Insider trading can be illegal or legal depending on when
the insider makes the trade
➢It is illegal when the material information is still nonpublic.
➢If the employees trade confidential matters, the competitors
may intervene and make use of the opportunity

3. CATEGORIES FOR INSIDERTRADING
Several different categories of insider trading are considered
illegal by the Securities and Exchange Commission.
➢Insider Trading Basics. ...
➢Misappropriation of Information. ...
➢Tipper and Tippee Liability. ...
➢Disclosure.

4. LEGAL INSIDERTRADING
➢ Legal insider trading happens in the stock market
➢The SEC requires transactions to be submitted electronically
in a timely manner
➢Transactions are submitted electronically to the SEC and
also must be disclosed on the company’s website
➢Securities Exchange Act of 1934 was the first step to the
legal disclosure of transactions of company stock

5. ➢SCOPE - How many people were affected
➢GAIN – How much did the insider make from the transaction
➢EVIDENCE – Anyone charged is innocent until proven guilty
The punishment for insider trading
depends on a few different factors

6. LEGAL DIFFERENCES IN NATION
UNITED KINGDOM-
Insider trading in the UK has been illegal since 1980, it proved difficult
to successfully prosecute individuals accused of insider trading. There
were a number of notorious cases where individuals were able to escape
prosecution. Instead the UK regulators relied on a series of fines to
punish market abuses.
EUROPEAN UNION-
In 2014, the European Union (EU) adopted legislation that harmonizes
criminal sanctions for insider dealing. All EU Member States agreed to
introduce maximum prison sentences of at least four years for serious
cases of market manipulation and insider dealing, and at least two
years for improper disclosure of insider information

7. INDIA-
Insider Trading in India is an offense according to Section 195 of the
Companies Act, Penalty for insider trading is imprisonment which may
extend to five years, minimum of five lakh rupees (five hundred
thousand) to twenty five crore rupees (two hundred and fifty million) or
three times the profit made

8. ➢The Securities and Exchange Board of India (SEBI) barred Reliance
Industries from trading for about an year the country's second most valued firm
➢ Accessing the equity derivatives segment for a year and has told the company
to disgorge Rs 447.27 crore along with an interest of 12 per cent dealing in
equity derivatives
➢directly or indirectly, for allegedly indulging in fraudulent trades in Reliance
Petroleum.
➢RIL has made “unlawful gains of Rs 447 crore” by adopting “fraudulent and
manipulative strategy/pattern”
➢The total penalty of RIL after adding interest comes close to Rs 1,300
crore.,
RELIANCE INDUSTRIES LIMITED(RIL)

9. OMEGA ADVISORS
➢Insider trading charges against hedge fund billionaire Leon
Cooperman in September 2016 for his trades in a company called
Atlas Pipeline
➢Cooperman was not barred from investing activities
➢Omega and Cooperman settled the case with a $5 million penalty
and forfeiture of profits
➢Omega manages some $3.6 billion in assets, most of it being
Cooperman's own money

10. The Formula for violating laws is simple:-
Construct an illegal factory, just do it
quick, make it big, and ensure that
investment is substantial

11. PRESENTED BY:-
Ashish gupta
121723604004
GITAM-MBA