This study attempts to look into the nature of insider trading and its detrimental effects on the stock market. It is found that price, dividend, EPS, and right issues are the major parameters that are used by the insiders to disseminate inside rumour-based information to exploit investors. About 44 per cent investors think that market gets volatile due to insider trading and nearly 30 per cent lose confidence over the market. Company directors, employees, Bangladesh Securities and Exchange Commission officials and Dhaka Stock Exchange officials and security houses are mostly responsible for these unethical practices. Stock market development can be ensured by enacting stringent insider trading laws and their enforcement.