If you were travelling through a suburban 1st class train compartment in Mumbai in the early 90s, you would invariably overhear a few Gujarati stock traders discussing company sensitive information. "XYZ maa bonus che" (there is likely to be a bonus in the shares of XYZ) a stock trader would reveal to another friend in the compartment. In fact, the trader was privy to some leaked information from company sources, that would today be described as price sensitive.

The leaked information was so rampant that nobody even considered it as price sensitive or being part of an insider trading network. The term often used was "tips".

These tips (mostly price sensitive information from company sources) were openly shared in trains, buses and even in investment magazines and investment periodicals through columns like "heard on the street", "market tips" etc.

In fact, price sensitive stock information has been leaked from within companies for the last several decades. This information has seen buying and selling in stocks and price manipulation based on sensitive data, that nobody considered illegal back then.

In the US Rajat Gupta, former head of McKinsey, was sentenced to two years in prison and a fine of $5 million on insider trading charges in the US. Gupta would hardly make headlines in India given that insider trading is not very serious and that our market watchdog SEBI lacks substantial investigative powers like "wiretapping".

Even today, insider trading is quite rampant and not taken as a serious crime in India, though corporates first serve notice to the stock exchange on any price sensitive information. In insider trading a person who has privy to price sensitive information shares it and uses the information to manipulate stocks and make money.

Of course, there have been cases where SEBI is still probing insider trading like the recent run-up in UB Group companies. But, it's not a serious offense and you can generally get away with a two-year ban from trading on the bourses, like in the recent case of Polaris Software MD who was barred from the securities market for two years.

Of course, even if you are barred from trading in the securities markets, you can always trade through friends and acquaintances.

So many companies and people including Vakrangee Softwares executives, former Hindustan Unilever executives, former Tata executives have been investigated and nothing substantial has come out so far.

Perhaps, if Rajat Gupta was investigated for insider trading practices in India, he would still be at the helm of the Indian School of Business and would still be invited as a guest lecturer. He would almost certainly never be jailed.

It's simply because insider trading in India is still taken callously.

GoodReturns.in