INVESTORS’ LEGAL PROTECTION AGAINST INSIDER TRADING IN CAPITAL MARKET IN INDONESIA

Abstract

This study aimed to assess insider trading on a trading buying and selling shares in the capital market. Besides, it also evaluated investors' legal protection against insider trading that occurred in the capital market under the provisions of capital markets act 8 of 1995. The primary consideration of the choice of these studies is that this study was to examine the theoretical legal protection of investors in the practice of insider trading in the stock market, with the interpretation of Juridical Capital Markets Act, No 8 of 1995. This research approach uses the statute and case approaches, which refer to legislation and approaches based on cases. Capital markets have a strategic role in national development as one source of financing for the business and investment vehicle for the community. Capital markets are alternative funding for both public and private. Once the magnitude of the role of capital markets in national economic development did not rule violations contrary to the principles of disclosure of information, other than that the weak supervision system by the manager or supervisor stock exchange, can lead to insider trading. Insider trading can occur when someone is doing a transaction with a buy or sell stock based on material information and has not been open to the public obtained from a company insider. Insider trading can result in losses for investors who do not receive the same information. Investors who did not receive such information do not have the same opportunity to make a profit because so requires legal protection. Legal protection can be either preventive or repressive.