Now, Sebi may also use 'name and shame' strategy to check insider trading

Posted By: Religare
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Sebi to check insider trading by using 'name and shame' strategy
After the finance minister asked banks to name and shame the wilful defaulters, the market regulator may also start using this strategy to check the insider trading by humiliating such traders and penalize them, according to an Economic Times report.

The recommendation was given by a Sebi constituted panel-- Sebi's International Advisory Board (IAB)—which also asked the regulator to consider having provisions to compensate victims of insider trading, besides encouraging an effective framework to provide legal protection to whistle-blowers.

"IAB suggested that Sebi should publicise major insider-trading cases in a separate section on Sebi website for easier access; may have provisions to compensate victims, if any, of insider-trading offences; and should encourage an effective whistle-blowing framework in securities market by ensuring adequate legal protection of whistleblowers. Heavy penalty along with naming and shaming were also suggested to be used as major deterrence to insider trading and other offenses in the securities market," said a Sebi communique on Tuesday.

Dion Global Solutions Ltd.

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