SCOPE AND APPLICABILITY OF THE TIPPER-TIPPEE THEORY OF INSIDER TRADING: A COMPARATIVE ANALYSIS IN INDIA AND UNITED STATES PERSPECTIVE

AUTHOR – ASHVIDHA SADHASIVAM, ASSISTANT PROFESSOR OF LAW AT KMC COLLEGE OF LAW, TIRRUPUR

BEST CITATION – ASHVIDHA SADHASIVAM, SCOPE AND APPLICABILITY OF THE TIPPER-TIPPEE THEORY OF INSIDER TRADING: A COMPARATIVE ANALYSIS IN INDIA AND UNITED STATES PERSPECTIVE, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (13) OF 2025, PG. 434-451, APIS – 3920 – 0001 & ISSN – 2583-2344

Abstract:

Insider trading in India significantly differs from that of the USA. Insider trading, being the cornerstone of securities law, which has theories that delineates the obligations and liabilities of persons involved in the insider trading. In the USA, the jurisprudential aspects say the theories plays a pivotal role. Among all the theories, the tipper-tippee theory has evolved giving recognition to not only the insiders but also the other persons associated, who can be also be non-insiders. Though, originated in the USA, its features exhibit to be applied to every jurisdiction, thus aids in identifying the yardsticks such as forms of malpractice, personal benefit and breach of trust taking place within the corporations. The tippee trades with the ulterior aim to trade with the information received from the tipper, that results in a nefarious intent. Although the insider trading comes under the broader purview, merely one of the theories of insider trading liability is dealt by this study. The research delves through the lens of the tipper-tippee theory prevalent in the USA.

Keywords: Tipper-tippee theory, Legal and Regulatory frameworks, Indian cases, Insider trading liability, USA, India.