Friction #10: The canker of insider trading that just won’t go away

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Editor's note: You could say Saurabh Mukherjea should have known better. Author of highly-rated books such as Coffee Can Investing and former CEO of Ambit Capital, Mukherjea just paid up Rs 1.38 crore to markets regulator Securities and Exchange Board of India to settle a case of alleged breach of insider trading and fraudulent trade practices norms.  Mukherjea of course isn’t the only market participant who has bought peace with the regulator by taking recourse to the negotiated settlement clause, which allows the person charged to pay a fine without the admission or denial of guilt. In 2018, mega investor Rakesh Jhunjhunwala too settled with the regulator after it initiated adjudication proceedings against him for alleged violation of PIT (Prohibition of Insider Trading norms) in the matter of Geometric Ltd.  Not just individuals, companies, of all hues, have run afoul of SEBI’s insider trading laws. In January this year, New India Assurance Company paid Rs 62 lakh to SEBI as settlement in a case of delayed compliance with an insider trading regulation related to a change in its shareholding in Axis Bank. …