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Assignment 04_ Ravi Bang

The document discusses two orders from the Securities and Exchange Board of India (SEBI) regarding insider trading violations by Financial Technologies (India) Limited (FTIL) and its subsidiary, National Spot Exchange Limited (NSEL). In both cases, SEBI found that key individuals engaged in insider trading by utilizing unpublished price-sensitive information before public disclosure, leading to penalties and restrictions on their ability to hold positions in regulated companies. The rulings emphasized the importance of adhering to securities laws and the consequences of violating insider trading regulations.

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8 views2 pages

Assignment 04_ Ravi Bang

The document discusses two orders from the Securities and Exchange Board of India (SEBI) regarding insider trading violations by Financial Technologies (India) Limited (FTIL) and its subsidiary, National Spot Exchange Limited (NSEL). In both cases, SEBI found that key individuals engaged in insider trading by utilizing unpublished price-sensitive information before public disclosure, leading to penalties and restrictions on their ability to hold positions in regulated companies. The rulings emphasized the importance of adhering to securities laws and the consequences of violating insider trading regulations.

Uploaded by

Ravi Bang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT 04 IN LIEU OF 2 ATTENDANCE

RAVI BANG
2021069
SECTION B

Order 1: Securities and Exchange Board of India vs. Financial Technologies


(India) Limited (J_2017_SCC_OnLine_SEBI_178)

Facts:
This case involves Financial Technologies (India) Limited (FTIL) and its alleged violation of
securities laws. The Securities and Exchange Board of India (SEBI) conducted an
investigation into the activities of FTIL and its promoters. The case arises from a circular
issued by National Spot Exchange Limited (NSEL) on July 31, 2013, which suspended
trading in contracts and deferred the settlement of pending contracts. NSEL was a subsidiary
of FTIL, and the suspension of contracts caused severe financial repercussions. SEBI accused
certain individuals connected with FTIL of engaging in insider trading based on unpublished
price-sensitive information (UPSI) about the company’s financial status before the circular
was issued.

Issues:
The central issue in this case is whether certain individuals engaged in insider trading by
using unpublished price-sensitive information concerning NSEL’s suspension of trading.
Another issue concerns whether FTIL’s directors and management were fit to continue
serving in positions of responsibility in light of their alleged involvement in the violations.

Ruling:
SEBI concluded that several individuals, including senior executives and promoters, had
access to unpublished price-sensitive information and had traded FTIL shares before the
market was aware of the NSEL crisis. SEBI found that these trades violated insider trading
regulations. The order imposed penalties on the individuals involved, barring them from
holding certain positions in companies regulated by SEBI and instructing them to return gains
from insider trading.

Order 2: Insider Trading in the Scrip of 63 Moons Technologies Limited


(J_2017_SCC_OnLine_SEBI_222)

Facts:
SEBI conducted an investigation into trading activities in the scrip of 63 Moons Technologies
Limited (formerly FTIL) over a period from April 27, 2012, to July 31, 2013. The
investigation revealed that certain key managerial personnel of FTIL, along with their
relatives, had sold a significant quantity of FTIL shares during a period when unpublished
price-sensitive information (UPSI) was available to them. The UPSI pertained to regulatory
actions and financial difficulties faced by NSEL, a subsidiary of FTIL. These actions
significantly impacted the value of FTIL shares once made public.

Issues:
The primary issue was whether the sale of shares by FTIL insiders during the period of the
UPSI constituted insider trading under SEBI’s regulations. Another related issue was the
determination of whether these trades resulted in averted losses by the insiders, which would
otherwise have been incurred had they sold the shares after the information became public.

Ruling:
SEBI held that the individuals involved had engaged in insider trading by selling shares while
in possession of UPSI. The order quantified the losses averted by the trades and mandated
disgorgement of the averted losses. Penalties were also imposed, barring these individuals
from accessing the securities market for a specified period and prohibiting them from holding
directorial or key managerial positions in listed companies.

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