Insider Trading Laws In India And The United States: A Comparative Legal Analysis
- IJLLR Journal
- 10 hours ago
- 1 min read
Archana Kumari, Faculty of Law, Usha Martin University
Dr. Swati Sawar, Faculty of Law, Usha Martin University
Insider trading restrictions in the US and India have witnessed considerable change in three dimensions- capital market ideology, regulatory capability and securities market equity. After the Great Depression, the US has evolved its insider trading jurisprudence through case law and administrative action while India’s has developed over time albeit not dichotomously. It was also more national-state oriented, with governing interests favoring growth following deregulation. This part outlines the evolution of insider trading laws in the U.S and India, highlighting the disparate origins and principles animating each system.
Early Development of Insider Trading Laws in the United States
U.S.insidertradinglawdevelopedinthewakeoftheGreatDepressionandnew realitiesabout money management. Before the 1930s, markets for U.S. securities had no demand for post- trade information except that based on fundamental principles such as good faith and fair dealing.CommonpracticeInsider tradingwasacommoncharacteristicofspeculativemarkets and was not necessarily illegal. The 1929 crash and crisis altered popular and political beliefs about market conduct, exposing abuses by corporate insiders, investment banks, brokers and others who manipulated hidden information. Federal regulation of securities rests on the premise that, absent regulation, markets will not assure that all information about a security is available to all investors at one time. The 1933 and the 1934 Securities Acts established the basis for much of US securities law.
