Question
Download Solution PDFTo whom is the term "insider trading" related?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Share Market.
- The term insider trading is associated with the share market.
- Insider trading is the buying or selling of a publicly-traded company's stock by someone who has non-public, material information about that stock.
Key Points
- Material non-public information is any information that could substantially impact an investor's decision to buy or sell the stocks that have not been made available to the public.
- Insider trading is illegal and comes with stern penalties including both potential fines and jail time.
- Securities and Exchange Board of India (SEBI) have stringent rules to prevent insider trading.
Additional Information
- Hawala: Hawala is the underground, cheap and instant medium to transfer the huge amount of money.
- Hawala is cheaper and less cumbersome than formal remittance channels such as banks, Western Union or Money Gram.
- Hawala system is used by Criminals, Businessmen, and Nonresidents to remit money.
- Halawa system is the backbone of the underworld, drugs/arms mafias, terrorists and smugglers. Businessmen use it transfer money to evade tax.
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