CORPORATE FINANCE
PROJECT
ON
INSIDER TRADING
&
THE SECURITIES AND EXCHANGE BOARD OF INDIA
BY
ANUJ N SEHGAL
CONTENTS
I.Emergence of The Securities Exchange Board Of India
II.Legal status of The Securities Exchange Board Of India
III.Objectives
IV.Salient features of the SEBI Act, 1992
V.Powers and Functions of the Securities Exchange Board Of India
VI.Insider Trading
Introduction
Protection under General Law
Insider Trading Law in India
Insider Trading Law in US
VII.Case
Introduction
Statutory Analysis
Judicial Analysis
Final Judgement
VIII.Conclusion
IX.Bibliography
EMERGENCE OF SEBI
The ever expanding investors' population and market capitalization led to a variety of malpractices on the part of companies, brokers, merchant bankers, investment consultants and others involved in new issues and stock in India.
The glaring examples of these malpractices are as under:
a)Existence of self-styled merchant bankers, investment consultants without sufficient expertise and infrastructure for proper services.
b)Unofficial private placements.
c)Rigging of prices just before public issue to bolster the image of the company in the eyes of prospective investors.
The Seat of Government
English: SEBI Bhavan, Head Office of Securities an...
Sydney Exchange Centre Entranced)Unofficial premiums on new issues.
e)Manipulations of prices even before listing.
f)Allotments with or without premium to the favoured persons.
g)Delays in finalizing the allotments and dispatch of allotment letters and refund orders before the due date.
h)Non-adherence of provisions of the Companies Act and other relevant Acts.
i)Violation of rules and regulations of the stock exchanges and listing requirements.
j)Absence of fair practices in trading in the market such as rigging of shares, manipulation of prices, insider trading and a large spread between the bid and offer prices.
k)Delay in delivery of shares and in making payments for sales by the brokers to their customers.
l)Problem of odd lots and poor liquidity of a number of shares in the secondary market.
m)Diversion of funds of the mega issues for a purpose other than intended...