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Trapping Insider Trading Perpetrators With Misappropriation Theory, Is That Possible?
Agus Riyanto, Paulus Aluk Fajar Dwi Santo, Suwardi Suwardi

Last modified: 2022-06-08


In Indonesia, the Capital Market Law implicitly acknowledges Fiduciary Duty Theory as part of handling Insider Trading process in the Indonesian Capital Market. This study concludes that the application of Fiduciary Duty Theory did not work well and implicated on the handling of Insider Trading in the Indonesian Capital Market, if compared to Misappropriation Theory whose application can reach all parties categorized as Insider Trading actors in the Capital Market Law, for both Insider and Tippee without considering whether if Tippee attempted to obtain insider information or not. Thus, the advantages of Misappropriation Theory which were found in this study, can be considered as provisions in the regulation of Insider Trading crimes and become recommendations for drafters and/or amendments to the Capital Market Law in Indonesia. That is by including the three elements of Misappropriation Theory, namely (1) Material information that has not been announced to the public (2) Securities transactions made based on such information; and (3) Personal profit obtained by the party conducting the transaction, become a formulation of norms in the draft the Capital Market Law.


Key words: Insider Trading, Fiduciary Duty Theory, Misappropriation Theory.

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