𝐈𝐧𝐬𝐢𝐝𝐞 𝐒𝐄𝐁𝐈’𝐬 30-𝐌𝐨𝐧𝐭𝐡 𝐏𝐫𝐨𝐛𝐞: 𝐋𝐞𝐠𝐚𝐥 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐊𝐞𝐭𝐚𝐧 𝐏𝐚𝐫𝐞𝐤𝐡 𝐁𝐚𝐧

Mint (Neha Joshi and Varun Sood has published a full one and a half pager comprehensive story on SEBI‘s recent investigation of Ketan Parekh for 30 months and eventually banning him from the securities market without any hearing though an ex-parte ad-interim order. SEBI’s front-running investigation found that Parekh had allegedly obtained non-public information of a major US fund’s trades from Singapore-based Rohit Salgaocar, who had an agreement to refer trades of that fund to Motilal Oswal Financial Services Ltd. and Nuvama Wealth Management Ltd.

In this context, Mr. Sumit Agrawal, Founder of Regstreet Law Advisors, is quoted in Mint’s article titled “𝘒𝘌𝘛𝘈𝘕 𝘗𝘈𝘙𝘌𝘒𝘏: 𝘐𝘕𝘚𝘐𝘋𝘌 𝘚𝘌𝘉𝘐’𝘚 30-𝘔𝘖𝘕𝘛𝘏 𝘗𝘙𝘖𝘉𝘌.” Discussing the referral arrangements of foreign institutions and the resulting trades in India, he emphasized that SEBI‘s primary focus is on the intent and the source of the revenue rather than the legality of the referral agreement itself.

With respect to why SEBI did not issue notices to Motilal and Nuvama, Mr. Sumit Agrawal is of the view that it was probably because based on the available evidence, there is no direct link suggesting that the brokerages knowingly facilitated misuse of nonpublic information. Further, the referral agreements themselves may not violate SEBI’s norms, but how the Singaporean citizen’s company executed them could have led to unlawful gains. Without evidence implicating the brokerages in these activities, Sebi would be cautious in taking regulatory action against them.

Mr. Chirag M. Shah, Advocate, expressed his views by stating that using there is a case for harsher punishment, like a lifetime ban, for repeat offenders. But that could lead to a constitutional challenge for violating the fundamental right to practice a trade and profession.

Article: https://lnkd.in/dn39jKR2

A copy of the article is also enclosed.

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