SEBI Slaps Rs 25L Fine, 1-Year Market Ban on 2 Individuals For Insider Trading in Jagsonpal Pharma
Consumer court
NSE analyzed JPL trades, flagged patterns suggesting insider trading based on UPSI deemed price-sensitive, leading to action.
New Delhi: Sebi has barred two individuals from the securities markets for one year and imposed a fine of Rs 25 lakh for indulging in insider trading in the shares of Jagsonpal Pharmaceuticals.
Individually, the regulator slapped a fine of Rs 15 lakh on Maneesh Kumar Jain and Rs 10 lakh on S V Subha Rao (former Chief Finance Officer of Jagsonpal Pharmaceuticals Ltd), Sebi said in an order passed on Friday.
Apart from these, the regulator has also directed Maneesh Kumar Jain to disgorge Rs 31.39 lakh along with the interest of 12 per cent per annum from February 22, 2022 till the date of deposit of the amount by Jain.
Sebi in its order noted that Rao, being the "insider", had communicated the unpublished price sensitive information unpublished price sensitive information (UPSI) with respect to substantial acquisition of shares to Maneesh Kumar Jain that led to the execution of trade by Jain in the scrip of JPL on February 21, 2022 i.e. during the UPSI period, thereby, violating the provisions of PIT rules.
The markets watchdog also found that Jain traded in the scrip of Jagsonpal Pharmaceuticals Ltd (JPL), when in possession of the UPSI (procured from Rao) relating to the substantial acquisition of shares and thereby made an unlawful gain of Rs 31.39 lakh.
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Therefore, Maneesh Kumar Jain has violated the provisions of Prohibition of Insider Trading (PIT) regulations, Sebi said.
The order came after NSE carried out a detailed analysis of JPL to identify clients whose trading pattern suggested possible trading on the basis of UPSI, in violation of insider trading rules if any, was prima-facie noted to be price sensitive by the exchange.
Thereafter, a detailed investigation was undertaken by Sebi to ascertain whether the suspected entity traded in the scrip of JPL when in possession of the UPSI and if there were any violations of the provisions of Sebi norms.
The period of investigation was from December 2021 to March 2022.
Based on the analysis of trading patterns, the capital markets regulator shortlisted Maneesh Kumar Jain as a suspected entity.
Further, upon examining the call data records of Maneesh Kumar Jain, Sebi observed that he had traded in the scrip of JPL, and had communication/contact on a frequent basis, with then JPL CFO S V Subha Rao during the relevant period.
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