Stock exchanges play a vital role in any capitalist economy as they provide a secondary market where investors can buy and sell shares under orderly conditions at fair and competitive prices. This role requires stock exchange operations to be regulated in order to enhance the efficiency, transparency and full disclosure in their operations. This is particularly true with respect to the potential harm associated with insider trading. In Zimbabwe the trading of shares is conducted through Zimbabwe Stock Exchange and is regulated by the Zimbabwe Securities Commission. The Zimbabwean Stock Exchange is a typical emerging stock exchange whose performance has been noteworthy in the past two decades in terms of returns on investment in United States dollar terms and in terms of share price increases. In recent years however, the Zimbabwe Stock Exchange has faced some challenges associated with insider trading. On the other hand principles of corporate governance, business ethics and morality have been emphasized as critical managerial attributes that result in fair trading and business practices. Based on literature review on the subject and responses to qualitative interviews with stakeholder groups on insider trading in Zimbabwe, this paper discussed the concept of insider trading and its causes and proposes a framework for combating insider trading in developing stock exchanges
