Abstract: Three decades back, insider trading was recognized as an injustice and a crime against shareholders and markets in many developed countries. Insider trading is illustrated by large share price and volume variations and heavy trading within a short span of time period. Inside information and its use for personal profits was regarded as a bonus of office and a benefit of having arrived at a high stage in life, at one time. Leakage of company’s news to insiders is usually a caused of insider trading in stock market, which affect the investor’s wealth creation. The objective of this paper is to examine the existence and working of insider trading, role of Securities exchange board of India in preventing insider trading. Various cases related to insider trading have been seen around the globe which shows that regardless of the control and regulation restriction imposed on insider trading at stock exchange in India or all over the world, these laws have not been effective to stop these kinds of activities within the stock exchange. Company policies and procedures and SEBI’s insider trading Act are not adequate enough to stop the insider trading, which loses the trust of general investors. Therefore, it is important to make such markets, which must be free from all types of frauds and insider trading. SEBI should also make a law or appoint a committee that can bring in cases of insider trading well before such trading takes place in the stock market so that interest of general investor is protected.