This website uses cookies to ensure you have the best experience. Learn more

Insider Trading In Stock Markets And Sebi.

10058 words - 40 pages

CORPORATE FINANCEPROJECTONINSIDER TRADING&THE SECURITIES AND EXCHANGE BOARD OF INDIABYANUJ N SEHGALCONTENTSI.Emergence of The Securities Exchange Board Of IndiaII.Legal status of The Securities Exchange Board Of IndiaIII.ObjectivesIV.Salient features of the SEBI Act, 1992V.Powers and Functions of the Securities Exchange Board Of IndiaVI.Insider TradingIntroductionProtection under General LawInsider Trading Law in IndiaInsider Trading Law in USVII.CaseIntroductionStatutory AnalysisJudicial AnalysisFinal JudgementVIII.ConclusionIX.BibliographyEMERGENCE OF SEBIThe 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.d)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 such as takeover bids of other companies, acquisition of shares or investments of other companies and for working capital.The malpractices and unfair trading practices have eroded investor's confidence. It multiplied the investor's grievances. The Government and the Stock Exchanges were rather helpless in redressing the investor's problems because of lack of proper penal provisions in the existing legislation.Realizing this, SEBI was constituted by the Government in April 1988 as a supervisory body to regulate and promote the securities market.LEGAL STATUS OF SEBIInitially, SEBI was established as an interim body under the administrative control of the Finance Ministry. Recently it was given statutory powers. These statutory powers were conferred on SEBI vide the Securities and Exchange Board of India Ordinance, 1992. The Ordinance was later on replaced by an Act of Parliament known as the Securities and Exchange Board of India Act, 1992.The preamble to the SEBI Act provides for the establishment of a...

Find Another Essay On Insider Trading In Stock Markets And SEBI.

Efficient Markets and Noise Trading Essay

1758 words - 7 pages INTRODUCTIONFinancial markets characterise by many entities that interact and affect each other in the trading process. In this context, there are two different approaches to stocks pricing: efficient markets (EM) and noise trading (NT). Each approach implements different scenarios that lead to different results. The aim of this paper is to look at these two different approaches and to compare and contrast between criteria that shape each

Stock Markets: Effective in Promoting Economic Growth?

1357 words - 5 pages with a vibrant stock market with the market capitalization of ........ in 2009. Comparatively it is higher than other countries with well developed financial market. Financial development can trigger economic growth. Levine (1997) defines five functions for financial intermediaries. He believes that each of the functions can enhance growth through two channels: capital accumulation and technological innovation. Pagano (1993) financial markets

Impact of insider trading on business ethics in the Union Bank of Switzerland

3048 words - 12 pages other banks, through straight buy outs or by assimilation of other banks. Currently a multinational company having offices all over the world, it is a global leader in the banking industry.This report analyzes the business ethics of insider trading and the consequences that Union Bank of Switzerland had encountered a few months ago. The company was involved with financial fraud, which included rogue trading in there London, based office. The

Middle East Countries’ Stock Markets under Contrarian and Momentum Strategies

1811 words - 7 pages index futures returns during periods of extreme trading imbalance . International Review of Economics & Finance, In Press, Corrected Proof. Kim, H. (2009). On the usefulness of the contrarian strategy across national stock markets: A grid bootstrap analysis. Journal of Empirical Finance, Volume 16, Issue 5, Pages 734-744. Lehmann, B. N. (1990). Fads, martingales, and market efficiency. Quarterly Journal of Economics, 105, 1−28. Lo, A. W

Stock Markets: The Castle in the Air vs The Firm Foundation Theory

1412 words - 6 pages Conclusion     6 Introduction Castle in the Air Theory The Castle in the Air theory was introduced by John Maynard Keynes, an well known economist and successful investor of the 1930s. It was Keynes’ theory that the keys to investing came from supernatural or psychic means. He applied psychological rather than financial principles to the study of the stock market. He believed that it was not only too difficult but also

Changes and continuities in world trading systems during 1450-1750

1425 words - 6 pages economy or maybe a faster way to earn money. With these new goals in their minds, the Portuguese started to occupy most of Africa, and started creating commerce between the two.By the fifteen century the Portuguese had established a well organized trading system with most of the Southern parts of Africa, including Cape of Good Hope in 1488, the southernmost trip. The trade was similar throughout most of the country. The main goods that were trade

CISCO’s Operations and Strategies in Foreign Markets

1382 words - 6 pages Cisco incorporated has grown significantly over the years, since its inception and has established itself as the number one technology company throughout the industry. Initially, Cisco started as manufacturers of modems and routers, and has expanded its scope over the years. This paper will attempt to address Cisco’s operations and strategies in foreign markets it will also delve into the strengths, weaknesses and threats in the political, legal

Fundamental and Technical Analysis of OTE (HTO) in NYSE (New York Stock Exchange) And ASE (Athens Stock Exchange)

1215 words - 5 pages different stock markets, not only in different countries, but in different continents as well. Following, there is a brief history of the company according to the 20-F form and the NYSE.Brief history and development of OTE (HTO) According to the 20-F Form of Hellenic Telecommunication Organization:Hellenic Telecommunications Organization S.A., known as OTE or OTE SA, was incorporated as asociété anonyme in Athens, Greece, under the

AD MANAGEMENT AND THE RECENT TURMOIL IN FINANCIAL MARKETS

1472 words - 6 pages Brothers Holdings Inc., (the fourth-largest investment bank in the US before declaring bankruptcy in 2008 due to substantial losses in its stock price, and trivialization of its assets by rating agencies) was a victim of ineffective oversight of traders by its managers amongst other reasons. There was also a disconnect between the management team and those on the trading floor. There were several attempts to stave off the disaster, but those at

POLITICAL STABILITY, REGULATION AND INVESTMENT IN THE AFRICAN MOBILE MARKETS

978 words - 4 pages policy reform that took place, most countries established national telecommunication regulatory authorities as core of the new framework to liberalize and regulate the industry. These authorities are mandated to not only monitor and ensuring a level playing field in individual national markets, but also shaping up the markets and encourage development of the industry by introducing and monitoring competition in different market segments. By 2010, 77

Implications For International Firms In Emerging and Developing Markets:

1939 words - 8 pages Comprising a significant section of the global economy, including approximately 4.8 billion people Emerging markets I are seen in recent times as being an particularly important growth source for multinational corporations (Akbar and Samii, 2005). Emerging market expansions are attractive strategies for multinational corporations due to the lure of potential capital gain and further expansion, however there are several risks associated with the

Similar Essays

Options Trading And Options Markets In Turkey

1856 words - 7 pages IntroductionDerivatives trading such as futures, forward, options, swaps and their engineered types composes the majority of financial markets in world markets. Volume of derivatives markets exceed much more that of spot financial markets those classical instruments like stock buying and bonds. the reason why this market is so popular is that they provide eliminating the future risks with current rates and provides significant speculative income

Risk Management In Stock Valuation And Markets

2705 words - 11 pages . (2012). The review of macroeconomic factors and stock returns. International Business Research, 5(2012), Goswami, Jung. (1997). Stock market and economic forces: Evidence from korea. (n.d.). Factors affecting stock prices in the the uae financial markets. HÜBNER. (2003). The generalized treynor ratio. BAKER, WURGLER. (2006). Investor sentiment and the cross-section of stock returns. THE JOURNAL OF FINANCE, LXI(2006), BAKER, WURGLER

Insider Trading And White Collar Crime

1477 words - 6 pages There are many different forms of fraud, and one of the more interesting ones is insider trading. Insider trading like many other forms can involve big social networks, and small social networks. The corporate crime that is being committed is that a person or group of people misuses certain information, when they have an obligation to keep that specific information confidential. This can be effortlessly seen in examining the case involving

Bubbles In Stock Markets Essay

1586 words - 6 pages movements. Froot and Obstfeld suggested, in an ‘intrinsic bubble’ model, that prices respond to dividend movements in a rational, albeit exaggerated, fashion. Stock prices overreact to dividends, but ‘there are no profit opportunities to trading to take advantage of this overreaction’.      Empirically, it is not true that dividends and stock prices correspond well. Indeed, dividend returns did not increase by as much as