BCI rules do not permit advertisement or solicitation by advocates or their firms. This website is for information only. See Disclaimer

SEBI disgorgement orders hit SAT wall

Featured in
sebi-kpsH--621x414@LiveMint

LiveMint featured an article discussing how disgorgement orders issued by SEBI continue to sputter at the appeals tribunal, exposing flaws in how the stock market regulator attempts to recover illegal gains.

In 2023 so far, the Securities Appellate Tribunal (SAT) has set aside disgorgement orders passed by SEBI in at least 3 major cases including the NSE India co-location case, NSE India Dark Fibre case and the Satyam matter.

Disgorgement is a remedial measure through which SEBI claws back illegal gains made by market participants through fraudulent means. However, there is no uniform procedure to calculate such gains. Courts have often held that the calculations made by SEBI have deviated from the principles of equitable approach leading them to be overturned.

In this background, the LiveMint article has featured the views of Mr. Sumit Agrawal, Managing Partner, Regstreet Law Advisors and former SEBI officer. Mr. Sumit Agrawal has observed that “SEBI has repeatedly deviated from the core disgorgement principle, which mandates quantifying ascertainable gains or avoided losses. Straying from this equitable approach, SEBI occasionally relies on total trade value, notional values, presumptions and even includes salary or bonus income. What was meant to be specific cases have turned routine. SEBI lacks a consistent disgorgement calculation method, granting officers discretion. Despite recommendations from committees, such as the Justice Wadhwa and the Justice Dave committees, for uniformity, this arbitrary approach persists.”

The LiveMint article also features the views of Mr. Anil Choudhary, Partner at Finsec Law Advisors. The complete article is enclosed herewith and is also accessible at https://lnkd.in/duX2WkPH Readers are welcome to share their views with Regstreet Law Advisors at info@regsla.com.

Latest RegPost

𝐒𝐄𝐁𝐈 𝐃𝐑𝐀𝐅𝐓 𝐂𝐈𝐑𝐂𝐔𝐋𝐀𝐑: 𝐓𝐑𝐄𝐀𝐓𝐌𝐄𝐍𝐓 𝐎𝐅 𝐈𝐍𝐓𝐄𝐑𝐄𝐒𝐓 𝐈𝐍𝐂𝐎𝐌𝐄 𝐎𝐍 𝐂𝐀𝐒𝐇 𝐂𝐎𝐋𝐋𝐀𝐓𝐄𝐑𝐀𝐋𝐒 𝐑𝐄𝐂𝐄𝐈𝐕𝐄𝐃 𝐁𝐘 𝐂𝐋𝐄𝐀𝐑𝐈𝐍𝐆 𝐂𝐎𝐑𝐏𝐎𝐑𝐀𝐓𝐈𝐎𝐍𝐒 𝐅𝐑𝐎𝐌 𝐂𝐋𝐄𝐀𝐑𝐈𝐍𝐆 𝐌𝐄𝐌𝐁𝐄𝐑𝐒 𝐀𝐍𝐃 𝐔𝐏𝐒𝐓𝐑𝐄𝐀𝐌𝐄𝐃 𝐂𝐋𝐈𝐄𝐍𝐓 𝐅𝐔𝐍𝐃𝐒

Read More

Cateories