Sebi casts net wider to tackle spike in insider trading cases

Escalation in illegal financial gains coincides with a sharp rise in regulatory scrutiny

- Apoorva Ajith & Neha Joshi

Sebi's rules now cover a wide array of corporate activities, from initiation of forensic audits to key approvals.

(REUTERS)

India’s markets regulator is tightening its grip on insider trading as illicit stock market gains surge, pushing companies to strengthen their compliance and disclosure practices.

The Securities and Exchange Board of India (Sebi) last week ordered that unlawful gains of over ₹173 crore be impounded after uncovering insider trading involving a Central Electricity Regulatory Commission (CERC) official and shares of Indian Energy Exchange Ltd (IEX).

That figure dwarfs earlier instances, such as the 2020 Bank of Rajasthan case, where insiders made illegal gains of ₹95.77 lakh during the company’s acquisition; the 2022 Lux Industries case involving ₹2.94 crore from trades on financial results; and a 2024 case related to Infosys Ltd, where leaked earnings data led to gains of ₹5.7 crore.

This escalation in illegal financial gains coincides with a sharp rise in regulatory scrutiny. Sebi initiated 287 insider trading investigations in FY25 and passed final orders in 15 cases.