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How We Helped a Client Avoid Insider Trading Pitfalls Meet Rajesh (Name Changed), a senior executive at a rapidly growing tech company. Rajesh had always been diligent in his work, but a recent company project landed him in unfamiliar legal territory—insider trading regulations. Rajesh was unaware that by sharing a key project detail with a trusted colleague during lunch, he could be risking serious legal consequences. The project, still under wraps, was expected to impact the company’s stock price. Without even realizing it, Rajesh was on the brink of becoming an “insider,” as defined by SEBI's Insider Trading Regulations of 2015. Here’s how we helped him: 1. Understanding Insider Trading: We explained that insider trading happens when a person buys or sells securities based on unpublished price-sensitive information (UPSI) that could materially affect a company's stock price. Rajesh’s casual disclosure about the project put him at risk of being classified as an insider. 2. Who is an Insider? We walked Rajesh through the legal definitions. As per SEBI regulations, an insider is someone who has access to UPSI, and this includes "connected persons"—anyone with a professional or personal link to the company, like Rajesh’s colleague. 3. Developing Compliance Practices: To safeguard Rajesh and his company, we developed a comprehensive compliance plan. This included clear guidelines on information sharing, NDA agreements for sensitive discussions, and a policy on when the company’s trading window—the period during which employees could trade company stock—would be closed. 4. Setting Up a Trading Plan: We helped Rajesh design a trading plan, which allowed him to trade company stock in compliance with regulations while avoiding suspicion of insider trading. By setting the plan months in advance, it became clear that his actions weren’t driven by any sensitive information he might have at the moment. Thanks to proactive legal guidance, Rajesh is now fully equipped to navigate the tricky waters of insider trading laws, ensuring both his personal security and the company’s market integrity.