[Peeyush Agarwal and Zarnaab Aswad are both 5th year law students at Dr. Ram Manohar Lohiya National Law University, Lucknow] Introduction Consider this: X is an employee of Y Corporation, which is a leading steel manufacturing company whose scrips are listed on stock exchanges. X, being an employee gets to know that Y Corporation has just discovered huge deposits of iron ore that, if extracted, will increase the total supply of steel, thus influencing the steel price (downwards) in the commodities market while possibly increasing the prices of the scrip of Y Corporation in the stock market.[1] Assume that this information is not yet disclosed to the public. So, X decides to exploit this informational advantage. He knows that his position as an employee of Y Corporation makes him an insider, so if he takes a position in securities of Y Corporation, he may be subjected to charges under insider trading regulations. To avoid those complications, he instead shorts on steel futures…
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