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The Supreme Court ruled that escrow release under Regulation 15B(8) of the Buyback Regulations does not preclude independent PFUTP fraud proceedings, as the inquiries operate in distinct fields. The Court remitted to SAT for fresh adjudication, directing resolution of trading data discrepancies and contradictory SEBI reports within six months.
The Securities Appellate Tribunal ruled that personal WhatsApp messages of a former employee cannot be used to impose liability on a registered investment adviser firm, emphasizing that penalties under the SEBI Act must be strictly proportionate to the adviser’s own conduct. This sets a critical precedent for digital evidence attribution and limits regulatory overreach in adviser misconduct cases.
The Supreme Court has ruled that under the PFUTP Regulations, mere position cornering or breach of trading limits does not amount to securities fraud unless there is evidence the manipulative activity induced investors to buy or sell. This sets a critical precedent for SEBI enforcement, requiring regulators to prove deceptive intent - not just market distortion - to establish fraud.
The Supreme Court ruled that shareholder ratification cannot cure fraudulent diversion of funds raised through preferential allotment, upholding SEBI’s penalties under PFUTP Regulations. The judgment reinforces that fraud in securities markets cannot be legitimized by post-facto approval, impacting corporate governance and regulatory compliance.