Regulation Of Insider Trading In India With Special Focus On Social Media Insider Trading

Mr. Nikunj Goyal, Amity Law School, Noida

ABSTRACT

As financial institutions and investors turn to social media to instantly share snippets of news and potential clues about market trends, the SEBI in India and the FBI and SEC in the USA are monitoring such postings for evidence of insider trading and leak of price-sensitive information. Companies must comply with pre-Internet federal securities laws covering anti-fraud, advertising, record keeping, and more, even though the use of Facebook, Twitter, Reddit, and WhatsApp is far outpacing the development of federal regulations aimed at social media. Therefore, it is indeed vital to understand the challenges posed to regulators, the role persons in power play in market manipulation and the threat that they pose to prevailing market sentiments, and finally the need for the revamping of the regulatory framework dealing with insider trading to suitably monitor the existing illicit use of social media without breaching an individual’s right to privacy and other such fundamental rights.