The Securities and Exchange Board of India last week ordered that unlawful gains of over ₹173 crore be impounded after uncovering insider trading involving a Central Electricity Regulatory Commission (CERC) official and shares of Indian Energy Exchange Ltd (IEX).
That figure dwarfs earlier instances, such as the 2020 Bank of Rajasthan case, where insiders made illegal gains of ₹95.77 lakh during the company’s acquisition; the 2022 Lux Industries case involving ₹2.94 crore from trades on financial results; and a 2024 case related to Infosys Ltd, where leaked earnings data led to gains of ₹5.7 crore.
This escalation in illegal financial gains coincides with a sharp rise in regulatory scrutiny. Sebi initiated 287 insider trading investigations in 2024-25 and passed final orders in 15 cases.
In 2023-24, Sebi had initiated 175 investigations and passed orders in 23 cases, up from 85 investigations and 18 orders in 2022-23. So far in 2025-26 (between 1 April and 15 October), Sebi has passed orders in 12 cases of insider trading.
Legal experts attribute the enhanced enforcement drive against insider trading to the amendments to the Sebi (Prohibition of Insider Trading) Regulations in March, which significantly expanded the scope of what constitutes Unpublished Price Sensitive Information (UPSI).
“The 2025 amendment has substantially expanded the scope of what must now be classified as UPSI,” said Ragini Singh, a partner at ThinkLaw Advocates. Corporate events such as awarding major contracts, fundraising plans, and changes in credit ratings are now explicitly defined as price-sensitive, she pointed out.
“Investigations are faster and wider in scope, often including coordinated search-and-seizure operations, digital evidence collection, analysis of options positioning, and rapid interim impounding of alleged gains,” said Alay Razvi, managing partner at Accord Juris.
Preemptive enforcement, proactive governance
While the regulatory changes were aimed at improving market integrity, the expanded definition of Unpublished Price Sensitive Information has made compliance more operationally demanding, legal experts said.
Razvi explained that Sebi’s rules now cover a wide array of corporate activities, from the initiation of forensic audits to key regulatory approvals. “The idea is to align UPSI classification more closely with LODR (Listing Obligations and Disclosure Requirements) materiality standards,” Razvi said.
Under LODR, listed companies have to follow specific rules on disclosing information to both ensure transparency and protect investors.
Sebi’s more recent enforcement model against insider trading is evolving to be more preemptive, said analysts.
Sebi’s “actions increasingly target high-value, sophisticated arrangements such as derivative trades, insider leaks, and event-driven transactions”, said Singh of ThinkLaw Advocates.
Technology is playing a key role in this crackdown. “Sebi’s enhanced surveillance systems now correlate trading patterns, disclosures, and even external data sources to flag anomalies at scale,” Razvi said.
While this has allowed for faster investigations, grey areas remain.
“The biggest grey zones involve timing and materiality judgments,” Razvi cautioned, noting it is not always clear when a multi-stage negotiation or investigation becomes a case of insider trading, creating significant compliance risks.
However, the industry is adapting to the tighter supervision by involving both internal tightening and external collaboration, explained Razvi. Companies are upgrading their digital databases and refining access controls, while intermediaries like investment advisers are expanding their compliance teams to keep pace with Sebi’s heightened inspection and enforcement.
“The overall trend,” Rizvi said, “is a shift from reactive compliance to proactive governance.”
