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Description
The recent scams have transformed overnight the Dalal Street's Blue-eyed boys into rogue traders. Given the notorious ubiquity of insider practices, it isn't wrong to equate them with the Insider Dens. The dens where you can get `anything' done for a price. You could be an IPO wannabe, a merger candidate, a prospective issuer in overseas market et al. Such is the state of practices that they have become the normal course of business. The recent scams are but ugly exposures of rogue deals, which would have gone undetected otherwise. What the present crises prove is that a decade of reform failed to prevent the recurrence of scams. Making the market a safer place is the biggest challenge to the regulators. Thanks to the scams, the focus now shifts towards the much-needed introspection. The following pages chronicle the different faces and phases of insider trading.
With
the brokers running the stock exchanges there is clear clash
of interest. To reduce the occurrence of insider trading Demutualization
of the stock exchanges is proposed.When
Anand Rathi, the former President of the Bombay Stock Exchange
called up the Surveillance wing of the exchange and asked
the crucial price sensitive information about institutional
selling little did he knew that his message was being taped
and this would bring him down from the privileged seat. What
is interesting is that all this happened in the presence of
the other board members. Consequently SEBI has suspended the
BSE board in the interest of the shareholder and orderly development
of the security market in India. However, this seemed to be
a routine happening at the BSE board. This is not the first
time SEBI has suspended the key members. This is the second
time in 2 years. BSE has framed action against key board members.
In 1999 the then president J C Parekh, Vice President and
the Executive Director R C Mathur were sacked for price rigging.
