Insider Trading Case: SEBI imposed ban on these 2 people! Fine of Rs 25 lakh
Nov 23, 2024
Insider Trading Case: SEBI said in the order that the regulator has imposed a fine of Rs 15 lakh on Manish Kumar Jain personally and Rs 10 lakh on SV Subha Rao. Apart from these, the regulator has also directed Manish Kumar Jain to refund Rs 31.39 lakh with interest at the rate of 12 per cent per annum from February 22, 2022 till the date of deposit of the amount by Jain.
SEBI on FridayInsider trading Action has been taken in the case. Taking action, the Securities and Exchange Board of India has banned two persons from the securities market for one year. SEBI has imposed a fine of Rs 25 lakh along with a ban for one year on insider trading in the shares of Jagsonpal Pharmaceuticals.
SEBI In an order passed on Friday, the regulator said the regulator has imposed a penalty of Rs 15 lakh on Manish Kumar Jain individually and Rs 10 lakh on SV Subha Rao (former chief financial officer of Jagsonpal Pharmaceuticals Ltd). Apart from these, the regulator has also directed Manish Kumar Jain to refund Rs 31.39 lakh along with interest at the rate of 12 per cent per annum from February 22, 2022 till the date of deposit of the amount by Jain.
Violation of PIT rules
According to a PTI report, the Sebi order highlighted that Subha Rao shared unpublished price-sensitive information (UPSI) about a significant share acquisition with Jain. This led Jain to trade shares of Jagsonpal Pharmaceuticals Ltd (JPL) on February 21, 2022 during the UPSI period, which was in violation of PIT rules.
Insider trading investigation
SEBI found that Jain traded JPL shares using UPSI from Rao regarding major share acquisitions, resulting in illegal gains of Rs 31.39 lakh. As a result, SEBI said Jain violated the rules of prohibition of insider trading (PIT). The order was given after a detailed analysis was done by NSE to identify clients whose trading pattern was likely to involve UPSI-based trading.
The period of investigation was from December 2021 to March 2022. SEBI conducted the investigation to find out whether the suspicious entity traded JPL shares while holding UPSI and whether any SEBI norms were violated? Based on trading pattern analysis, SEBI identified Manish Kumar Jain as a suspect.
Communication between suspects
SEBI's examination of call data records revealed that Manish Kumar Jain spoke with the then JPL CFO SV Subha Rao several times during the relevant period. This frequent contact raised suspicions about insider trading activities involving JPL shares. This case underlines the importance of complying with insider trading regulations and maintaining market integrity. SEBI's action is aimed at preventing similar violations and maintaining fair trading practices in securities markets.
[The Economic Times]
