You may have seen the term "insider trading" in the news. It is one of the most serious crimes in the stock market, and SEBI, our market regulator, works hard to stop it. Here is what it means and how it is caught, in simple words. This is for learning only.
What insider trading is
Some people inside a company know important news before the public does — results, a big order, a merger. This secret, price-moving information is called unpublished price-sensitive information, or UPSI.
Insider trading is when someone uses that secret information to buy or sell shares before the news is public. For example, a manager who knows profits will jump, and buys shares the day before the results — that is insider trading.
Why it is unfair (and illegal)
The stock market only works if everyone plays by the same rules. If insiders can trade on secrets, ordinary investors are always one step behind and always lose out. That destroys trust. So the law bans it, and SEBI treats it as a top priority.
How SEBI catches it
SEBI has become far more aggressive and high-tech about this. A few facts show the scale:
- In 2024-25, SEBI started 287 insider trading investigations.
- Its rules (the PIT Regulations) were tightened again in 2025, expanding the list of what counts as secret information and forcing companies to keep detailed digital records of who knew what, and when.
- SEBI now uses data analysis and surveillance technology to spot suspicious trading just before big announcements.
Recent cases have involved well-known companies, and penalties include heavy fines, returning the illegal profits, and bans from the market.
What it means for you
As an ordinary investor, you cannot and should not try to trade on "tips" that sound like inside information — acting on them can make you part of the crime, and it is exactly the kind of "secret" that is usually fake anyway. The honest edge is not secret information. It is a sound, disciplined process applied patiently and transparently.
That is the spirit of a SEBI-registered research approach and of our rule-based Model Portfolio, where every call is recorded openly. To understand why chasing tips and famous names rarely works, see should you copy star investors' portfolios. You can also start a free trial.
Insider trading is cheating with secret information, and SEBI is catching more of it every year with tougher rules and smarter tools. For the rest of us, the lesson is simple: ignore "tips", and rely on honest research instead.
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