SEBI, India’s market regulator is investigating six IndusInd Bank officials to find out if they sold stock while knowing about accounting issues at the bank- before this information was made public. Securities and Exchange Board of India is reviewing the timing of share sales by six IndusInd Bank officials. The aim is to determine whether these trades violated regulatory rules or the bank’s internal code of conduct- The Economic Times Reported. IndusInd Bank is the country’s fifth-largest lender.
Investigations are in preliminary stages and show cause notices to the individuals and to the bank, a formal request from the regulator for a response has not yet been sent. Reuters reported earlier this month that a forensic review by audit and advisory firm Grant Thornton found two bank executives traded in its shares while they were aware of accounting lapses at the bank but before those were made public.
The bank had disclosed in March that years of incorrect accounting of internal derivative trades had led to a $230 million hole in its $60.8 billion balance sheet. Its chief executive Sumant Kathpalia and deputy Arun Khurana stepped down last month. Encashing employee stock options when aware of unpublished price sensitive information can be a violation of the regulator’s rules.
India’s market regulator, SEBI, is reviewing the timing of share trades made by six IndusInd Bank officials to determine whether the transactions breached regulatory norms or the bank’s internal code of conduct. IndusInd Bank is the fifth-largest lender in the country, according to sources familiar with the matter.
What Is Insider Trading?
Insider trading is the buying or selling of a company’s stocks or other securities by someone who has access to confidential, non-public information about the company. If someone has access to important, non-public information about a company, such as a major loss, a merger, or a fraud, and uses that confidential information to buy or sell the company’s shares for personal gain or to avoid a loss, it is considered insider trading.
