Regulations, 2015. The company stated the warning does not affect its financial or operational capabilities. Insider trading, involving use of non-public material information for securities trading, is illegal and undermines market integrity and investor confidence.
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Nestle India received warning from the Securities and Exchange Board of India (SEBI), for a breach of insider trading regulations.
The warning was issued to Nestle India's compliance officer following an alleged violation of SEBI's Prohibition of Insider Trading Regulations, 2015.
The specific details of the breach and the identity of the person involved have not been disclosed by Nestle India.
Nestle India has stated that this warning has no impact on its financial and operational capabilities and was provided in accordance with SEBI Listing Regulations.
Nestle India is a major player in India's fast-moving consumer goods (FMCG) sector, known for brands like Maggi instant noodles, Nescafe coffee, and KitKat chocolates.
Insider trading is the act of buying or selling a company's securities (like stocks or bonds) based on "inside" or non-public, material information about that company.
Generally, insiders include company officers, directors, employees, and anyone with access to confidential information, as well as those who receive such information from them ("tippees").
Insider trading is illegal because it gives those with privileged access an unfair advantage over other investors who don't have access to the same information. This compromises the integrity of the market and erodes investor confidence.
Individuals and companies found guilty of insider trading can face substantial fines. In some cases, individuals can face imprisonment for engaging in insider trading.
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Securities and Exchange Board of India (SEBI)
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PRACTICE QUESTION Q. What is the most accurate definition of insider trading? A) Buying or selling stocks based on publicly available information. B) Trading stocks of a company by its employees. C) Buying or selling securities using non-public, confidential information. D) Selling stocks to avoid losses when the market is declining. Answer: C Explanation: Insider trading is defined as trading based on material non-public information, giving an unfair advantage to those with inside knowledge. |
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