Ramesh is an employee of an XYZ stock company, he shares some price-sensitive information with one of his relative. His relative further share this information with one of his friend who uses it to make profit from the s

According to the SEBI (Prohibition of Insider Trading) Regulations, 2015, "unpublished price sensitive information" means any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following: - financial results; dividends; change in capital structure; mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and such other transactions; changes in key managerial personnel. Further, as per the SEBI (Prohibition of Insider Trading) Regulations, 2015 "Connected Person" means,- any person who is or has during the six months prior to the concerned act been associated with a company, directly or indirectly, in any capacity including by reason of frequent communication with its officers or by being in any contractual, fiduciary or employment relationship or by being a director, officer or an employee of the company or holds any position including a professional or business relationship between himself and the company whether temporary or permanent, that allows such person, directly or indirectly, access to unpublished price sensitive information or is reasonably expected to allow such access. Ramesh being an employee of XYZ limited is a connected person. SEBI (PIT) Regulations, 2015 prohibits communication of unpublished price sensitive information to any person. It provides that no insider shall communicate, provide, or allow access to any unpublished price sensitive information, relating to a company or securities listed or proposed to be listed, to any person including other insiders except where such communication is in furtherance of legitimate purposes, performance of duties or discharge of legal obligations. It also provides that no insider shall trade in securities that are listed or proposed to be listed on a stock exchange when in possession of unpublished price sensitive information. When a person who has traded in securities has been in possession of unpublished price sensitive information, his trades would be presumed to have been motivated by the knowledge and awareness of such information in his possession. Ramesh, his relative and relative's friend have violated the provisions of SEBI (PIT) Regulations, 2015. The SEBI (PIT) Regulations, 2015 provides that any contravention of these regulations shall be dealt with by the Board in accordance with the SEBI Act. Further, Ramesh has also breached his moral/fiduciary duty. Being an employee of the Company, Ramesh should have refrained from communicating any insider information to anyone and should have upheld his moral ethics. As regards measures to control the problem, the SEBI (PIT) Regulations, 2015 itself provides for many safeguards in the matters. A few are listed below: Maintenance of structured digital data base of unpublished price sensitive information and persons who have access to it Mandatory Closure of trading window Formulation of Trading Plans Disclosures of trading by Insiders Code of Fair Disclosure Penal provisions Some other general measures to control the problem are: Regular training and education of all employees to apprise them about the sensitivity and gravity of the matter and its penal consequences; Entering of non-disclosure agreement / confidentiality agreement with all employees