Existence of The Principle of Openness and Legal Protection for Investors Due to Insider Trading Practices in Securities Transactions in The Capital Market

Abstract

The principle of openness is fundamental in maintaining transparency and fairness within the capital market, ensuring that all investors have equal access to essential information. This study explores the existence of the principle of openness and the legal protection available to investors affected by insider trading practices in securities transactions. Insider trading, where individuals with privileged access to non-public information exploit this for personal gain, undermines market integrity and investor confidence. The study uses qualitative research methods, including literature reviews and case analyses, to examine the effectiveness of current regulations in protecting investors from the adverse effects of insider trading. The findings highlight that while regulatory frameworks exist to promote transparency and prevent insider trading, enforcement remains a significant challenge. The study emphasizes the need for stricter regulations and more robust enforcement mechanisms to ensure that the principle of openness is upheld and that investors receive adequate legal protection. Additionally, the research points to the necessity of improving market surveillance and increasing penalties for violations to deter insider trading effectively. This article concludes that the reinforcement of the principle of openness is critical to sustaining trust in the capital market. Legal reforms and enhanced regulatory practices are essential to safeguarding investors from the detrimental impacts of insider trading, thereby fostering a more transparent and equitable market environment.