SEBI issues Settlement Order in adjudication proceedings for violation of insider trading regulations
Proceedings had been initiated against the Applicant for alleged violation of Regulation 3(ii) of the SEBI (Prohibition of Insider Trading) Regulations 1992 read with Regulation 12 of the SEBI (Prohibition of Insider Trading) Regulations 2015
The Securities and Exchange Board of India (SEBI) has issued a settlement order in the matter wherein adjudication proceedings were initiated against Shri Nishat Shailesh Gupte (applicant),to inquire into and adjudge under the provisions of Section15Gof the Securities and Exchange Board of India Act, 1992 (SEBI Act) for the alleged violation of the provisions of Regulation 3(ii) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992(PIT Regulations, 1992)read with Regulation 12 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015(PIT Regulations, 2015)alleged to have been committed by the applicant.
It was observed in the SCN (Show Cause Notice) that the SEBI had conducted an investigation into the matter of insider trading activity of certain entities in the scrip of United Spirits Limited (USL/Company)and observed that certain entities had traded in the scrip of USL on the basis of Unpublished Price Sensitive Information (UPSI)and the Noticee, being an insider, had communicated the said UPSI to the said entities.
It was noted that an order was also passed by the Whole Time Member of SEBI against the applicant on the basis of the same investigation. Aggrieved by the findings in the said order, the applicant had preferred an appeal before the Hon'ble Securities Appellate Tribunal (SAT). Pending the said appeal, the applicant also filed another settlement application to settle the said proceedings.
The abovementioned settlement amount and non-monetary terms were communicated to the authorised representatives of the applicant. The applicant had proposed payment of Rs. 45,23,500towards full and final settlement of all regulatory, civil or criminal proceedings in relation to the facts contained in the SCN without admitting or denying any violation on the part of the applicant. The applicant also agreed for voluntary compliance of non-monetary terms.
In view of the acceptance of the settlement terms and receipt of settlement amount as above by the SEBI, vide order dated November 04, 2020, the Hon'ble SAT granted its approval to the abovementioned settlement in terms of Regulation 24(2) of the Settlement Regulations and disposed of the appeal filed by the applicant against the Order dated January 10, 2020 of the Whole Time Member.
Therefore, in terms of the abovementioned settlement, the instant adjudication proceedings initiated against Mr. Nishat Shailesh Guptehave been disposed of in terms of section 15JB of the SEBI Act read with Regulation 23(1) of the Settlement Regulations on the basis of the settlement terms.
It has also been stated that in terms of Regulation 28 of the Settlement Regulations, this order is without prejudice to the right of the SEBI to take any enforcement action including restoring or initiating the proceedings in respect to which this settlement order is passed, if the applicant fails to comply with the settlement order including the voluntary compliance of non-monetary terms; or at anytime after the settlement order is passed, it comes to the notice of the SEBI that the applicant has not made full and true disclosure; or the applicant has violated the undertakings or waivers filed during the settlement proceedings.
This settlement order which has been passed on10th November,2020 is to come into force with immediate effect and has to be read with the order passed by the Hon'ble SAT.