SEBI

Beyond Trading: The Evolving Law on UPSI Communication

Summary: An allegation of communication of unpublished price sensitive information under Regulation 3 of the SEBI (Prohibition of Insider Trading) Regulations, 2015, cannot be established merely basis proximity between parties or trading pattern. Balram Garg held that cogent material such as emails, letters, etc., will be required. The recent AGEL and RHI Magnesita orders sharpen this further, showing that a call or contact between parties, without more, will not suffice. Ultimately, the outcome of any allegation of UPSI communication is fact sensitive. Together, these rulings establish a clear evidentiary requirement: that SEBI must prove that UPSI was communicated, not merely that the parties had the opportunity to communicate it.

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No such thing as innocent fraud: Key implications of the Supreme Court decision in Reliance Industries Ltd. and Ors. v. SEBI

Summary: The Supreme Court recently ruled[1] on SEBI’s case of fraud against Reliance Industries Ltd. (“RIL”) and twelve of its agents for trades in respect of Reliance Petroleum Ltd. (“RPL”) in 2007. Its emphasis on establishing intent when determining the elements of fraud in Regulation 2 (1) (c) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”), has implications for SEBI’s anti-fraud enforcement. This blog examines the fallout of the judgement.

Continue Reading No such thing as innocent fraud: Key implications of the Supreme Court decision in Reliance Industries Ltd. and Ors. v. SEBI

Summary: The Securities Appellate Tribunal and Supreme Court recently had the occasion to examine what amounts to securities fraud. While in BDMCL, the SAT examined whether the essential ingredients of fraud were satisfied, in Terrascope, the Supreme Court ruled that false promises in fundraising documents amount to fraud and the same cannot be ratified subsequently by shareholders. Together, these rulings highlight the critical role of transparency and accountability in corporate disclosures.

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Frozen Wallets and Fading Trust: Legal Remedies available in cases of Cryptocurrency frauds and data breach

Summary: This two-part series uses the WazirX cyberattack of July 18, 2024, in which crypto assets worth approximately USD 230 million were stolen from a multisig wallet, as a factual anchor to map the full spectrum of legal remedies available to Indian crypto users whose assets have been frozen, eroded, or subjected to proposed “socialisation” haircuts following a platform breach. Part I examines the criminal, cyber law, and data protection remedies available to crypto users following a platform breach and explains how a layered strategy combining these remedies offers the most effective path.

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SEBI’s power to revisit penalty orders, including Nil penalties, under Section 15-I (3) of the SEBI Act, 1992

Summary: Section 15-I (3) of the SEBI Act, 1992, empowers SEBI to revisit and enhance penalties imposed by the adjudicating officer, including orders where no penalty is imposed, within a period of three months from the date of passing of the order. However, this power can be exercised only if the order passed by the adjudicating officer is erroneous and not in the interests of the securities market. This revisionary power represents a critical component of SEBI’s regulatory framework — it allows the market regulator to modify orders passed by the adjudicating officer.

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Is SEBI obligated to provide only the documents it relies upon?

Summary: This blog analyses the duty of the Securities and Exchange Board of India (“SEBI”) to disclose documents during regulatory proceedings. It traces the judicial evolution of SEBI’s disclosure obligations and discusses contrasting judicial views on the extent and limits of such obligation.

The Securities and Exchange Board of India (“SEBI”), as a regulator and a quasi-judicial body, is dutybound to act fairly and adhere to the principles of natural justice while conducting proceedings against parties. One such duty is to grant noticees access to the material that form the basis of the findings/ allegations made against them in the show cause notice.

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Expanding the Regulatory Framework: Deep dive into SEBI’s new AML/CFT guidelines

INTRODUCTION

The Securities and Exchange Board of India (‘SEBI’), through its Master Circular dated June 06, 2024, issued ‘Guidelines on Anti-Money Laundering (“AML”) Standards and Combating the Financing of Terrorism (“CFT”)/ Obligations of Securities Market Intermediaries under the Prevention of Money Laundering Act, 2002,’ (“Master Circular/2024 Guidelines”),[1] emphasising the need for stricter AML/ CFT measures in the securities market, given global efforts against drug trafficking, terrorism, and other serious crimes. The 2024 Guidelines supersede the SEBI AML/ CFT Guidelines of February 03, 2023 (“2023 Guidelines”),[2] strengthening the obligations of market intermediaries and aligning with international standards from the Financial Action Task Force (“FATF”).

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Navigating ESG Compliance: Lessons from Recent Trends and the Santos Case

In an era marked by growing environmental consciousness and regulatory oversight, companies across the globe are facing heightened scrutiny over their sustainability claims. The recent lawsuit[1] against Santos Ltd., a major Australian energy company, serves as a wake-up call for corporations navigating the evolving landscape of Environmental, Social, and Governance (ESG) compliance. This article explores key takeaways from this landmark case, highlights the current ESG regulatory framework in India, and provides practical guidance for companies and investors to avoid similar pitfalls.

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Scope of summoning Indian nationals for virtual testimonies by Securities and Exchange Commission- Legal limits by local laws and international cooperation framework

Introduction

International law enforcement authorities are increasingly relying on mutual cooperation to obtain evidence or information outside their jurisdictional authority. Conducting joint investigations into prospective securities law violations, spanning countries, is also becoming common practice. This article discusses the scope and powers of the United States Securities and Exchange Commission (“SEC”) to seek/ obtain documents and witness testimonies from an Indian national involved in potential securities law violations abroad, which may have implications in the United States.

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Obligations placed on stockbrokers to curb fraud and money laundering

The Securities and Exchange Board of India (“SEBI”) has held that preventing and detecting fraud or market abuse is a key pillar of investor protection. Consequently, SEBI has been relentless in introducing and amending rules, regulations, and circulars to regulate practices tantamount to fraud or market abuse.

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