What is INSIDER TRADING?• Insider trading is the trading of a public company's stock or

other securities (such as bonds or stock options) by

individuals with access to non-public information about the

company. In various countries, trading based

on insider information is illegal.

• "Insider trading" is a term that most investors have heard and usually

associate with illegal conduct. But the term actually includes both legal and

illegal conduct. The legal version is when corporate insiders—officers,

directors, and employees—buy and sell stock in their own companies.

When corporate insiders trade in their own securities, they must report

their trades to the SEC.

Examples of insider trading cases that have been brought by the SEC/SEBI are cases against:•Corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments;•Friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information;•Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;•Government employees who learned of such information because of their employment by the government; and•Other persons who misappropriated, and took advantage of, confidential information from their employers.

•On Friday October 16, 2009, Raj Rajaratnam was arrested by the FBI and accused of conspiring with others to engage in insider trading in the stock of several publicly traded companies. U.S. Attorney Preet Bharara put the total profits in the scheme at over $60 million, telling a news conference that

it was the largest hedge fund insider trading case in United States history.

•Rajaratnam allegedly profited from information received from:Robert Moffat, a senior executive of IBM considered next in line to be CEO[31]

Anil Kumar, a senior executive of McKinsey & Company and close friend of Rajat Gupta (its former CEO) who was later also accused of passing information to RajaratnamRajiv Goel, a midlevel Intel Capital executiveRoomy Khan, previously convicted of wire fraud for providing inside information from her employer, Intel, to Rajaratnam

It was alleged that Rajaratnam also conspired to get confidential information on the $5 billion purchase

by Warren Buffett’s Berkshire Hathaway of Goldman preferred stock prior to the September 2008 public announcement of that transaction. The Wall Street

Journal reported in April that a former member of the board of directors of Goldman Sachs and

former McKinsey & Company chief executive Rajat Gupta told Rajaratnam about Berkshire's

investment before it became public.

Rajat Gupta, a former Goldman Sachs Group Inc. and Procter & Gamble board member, arrives at the Manhattan Federal Court in New York May 22, 2012.CREDITS: REUTERS/KEITH BEDFORD

TOP SECRET INVESTMENT DEALR. Gupta is accused of tipping Raj Rajaratnam about a deal that gave Goldman a $5-billion boost from renowned investor Warren Buffet at the height of the 2008 financial crisis, in an illegal breach of his fiduciary duties.

FBI wiretap on July 28, 2008 of McKinsey senior

partner emeritus Rajat Gupta speaking to Galleon

Group founder Raj Rajaratnam about Goldman

Sachs, senior partner Anil Kumar, Galleon

International and Kohlberg Kravis Roberts.

On October 24, 2012, Gupta was sentenced to two years in prison by

Judge Jed Rakoff of the United States District Court in Manhattan for leaking

boardroom secrets to former hedge fund manager Raj Rajaratnam. His

conviction was upheld by a Federal Appeals Court on March 25, 2014. His

prison sentence began on June 17. On June 11, 2014 US Supreme

Court rejected Gupta's bail plea, a week before his prison term begins.

Click on the Icon to listen the Wiretap Source : Wikipedia.org

References:• http://en.wikipedia.org/

• http://commons.wikimedia.org/ ( Audio)

• http://in.reuters.com/

• http://www.sec.gov/

• http://www.sebi.gov.in/

DEEPANKAR KHAREdkhare93@gmail.com