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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 Supreme Court held that professional clearing members in the NSE’s futures-and-options segment have no statutory duty to verify individual client positions and that restitution orders beyond the powers granted by the SEBI Act are ultra vires. As a result, SEBI cannot impose blanket restitution on PCMs, leaving liability with the trading members and their clients.
SAT affirmed SEBI's two-year market debarment and penalties on Omaxe Ltd., its promoters and former CFOs for round-tripping and misstating accounts. The decision underscores that debarment is a proportionate sanction for corporate fraud, binding listed firms and key managerial personnel.
The SAT ruled that the conditions in sub-clauses (i)-(iii) of SEBI’s Regulation 27(1) bind not only the promoter’s direct entities but also borrowers, subsidiaries and associates linked to the promoter. This interpretation broadens the scope of prohibited rating assignments for credit rating agencies, exposing them to liability for ratings tied to any promoter-related borrowing.
The Bombay High Court held that criminal prosecution under Section 26 of the SEBI Act is exclusive to SEBI, so an FIR alleging front-running cannot proceed without a formal SEBI complaint. This reinforces that special securities statutes override ordinary criminal provisions, limiting police initiation of such cases. The decision affects dealers, mutual-fund firms and any party subject to SEBI-triggered investigations.
The Supreme Court reinstated SEBI's penalty on Tara Jewels promoters, ruling that merely possessing unpublished price-sensitive information and trading on it satisfies insider-trading liability, irrespective of any profit or the intended use of the proceeds. This establishes that motive or purpose of proceeds is irrelevant for penalty under the SEBI Act, affecting all present and future insider-trading cases.
The Bombay High Court has ruled that Special Courts under the SEBI Act cannot take cognizance of offences without first affording the accused an opportunity to be heard, as mandated by the first proviso to Section 223 of the BNSS 2023. This sets a critical procedural safeguard for financial defendants, ensuring fair trial rights are not bypassed even in regulatory prosecutions.
SAT Mumbai dismisses an appeal by a society lacking direct interest in SEBI's order, reaffirming that only 'aggrieved persons' under Section 15T of the SEBI Act can challenge regulatory decisions. This ruling clarifies locus standi requirements for appeals before SAT, impacting stakeholders seeking judicial review of SEBI orders.
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 Securities Appellate Tribunal ruled that a director who has properly resigned cannot be penalized for post-resignation misconduct unless they retained de facto control or actively participated in the violations. This clarifies the boundary of accountability for former directors and protects compliant exiters from retrospective liability under SEBI’s enforcement regime.
The Securities Appellate Tribunal ruled that unregistered investment advisors cannot retain fees collected from clients, regardless of whether investors seek refunds. The decision underscores SEBI's power to enforce full restitution, reinforcing investor protection and regulatory compliance in securities advisory services.
The Securities Appellate Tribunal permitted a 73-year-old appellant to sell securities from her demat account to fulfill SEBI-imposed disgorgement and penalty obligations, clarifying that debarment from market access does not prohibit asset liquidation for regulatory compliance. This ruling sets a precedent for senior citizens and individuals facing financial hardship under SEBI enforcement actions.
Directors remain criminally liable under the SEBI Act for non-refund of investor funds even after the company's dissolution, as the offence is continuing in nature and not barred by limitation under CrPC Section 468. This ruling expands accountability beyond corporate shells, reinforcing investor protection in unregistered collective investment schemes.
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.