Insider trading liability upheld where admissions and transaction control showed access to unpublished price sensitive information.

An insider is a person who has received or had access to unpublished price sensitive information, and trading while in possession of such information is prohibited. On the facts, the appellant's recorded statements showed active participation in share transactions, including placing orders, signing cheques and delivery instructions, and knowing how the transactions were executed. The sale occurred before the relevant results were disclosed, and information about the subsidiary's loss was already price sensitive and available to the connected insider by virtue of his relationship with the company. These circumstances, together with the appellant's admissions, negatived the claim that she was merely a name lender and supported insider status, so the penalty was upheld.

---

---

Issues: (i) Whether the appellant was an insider and had dealt in the shares of Tata Finance Ltd. while in possession of unpublished price sensitive information, so as to attract liability under the insider trading regulations.

Issue (i): Whether the appellant was an insider and had dealt in the shares of Tata Finance Ltd. while in possession of unpublished price sensitive information, so as to attract liability under the insider trading regulations.

Analysis: Regulation 2(e) defines an insider to include a person who has received or has had access to unpublished price sensitive information, and Regulation 3 prohibits dealing in securities while in possession of such information. The appellant's own recorded statements showed that she placed orders for share transactions, signed cheques and delivery instructions, and was aware of the manner in which the transactions were carried out. The sale of the shares took place before the relevant results were made public, while the information concerning the loss of the subsidiary was price sensitive and had already been available to Shri Dilip Pendse by virtue of his connection with the company. The surrounding circumstances and the appellant's admissions established her active role in the transactions and negated the plea that she was merely a name lender.

Conclusion: The appellant was held to be an insider who had traded in the shares while in possession of unpublished price sensitive information, and the penalty was upheld against her.

---