Factorial case: Sebi reaches out to SEC

Requests SEC for help in getting chat transcripts from Bloomberg to help it probe insider trading on the part of an offshore hedge fund

The Securities and Exchange Board of India (Sebi) has reached out to its US counterpart, the Securities and Exchange Commission (SEC), seeking assistance in an insider trading investigation involving an offshore hedge fund.

It has requested SEC for help in getting chat transcripts from Bloomberg to help its investigation.

“The Sebi counsel states the investigation in the present case involves cross-border investigation and since Bloomberg, which has its headquarters in New York City, US, has refused to share information required for this case, Sebi has sought the assistance of the SEC in the matter. As a result, it will take four to five months to complete the investigation,” said a Securities Appellate Tribunal (SAT) order.

SAT has asked the stock market regulator to complete its investigation into alleged insider trading involving Factorial Master Fund within two months. It has also asked the regulator to take appropriate action if needed.

Earlier, Sebi had barred Factorial Master Fund from accessing the capital market on allegations of insider trading. The fund is said to have acted on the basis of advance information about an offer for sale by L&T Finance Holdings to make a profit of about Rs 20 crore.

In an order on Friday, SAT said the order restricting access to the market would stand void if the regulator was unable to complete its investigation within the specified period. “In that event, the impugned confirmatory order dated October 16, 2014, continuing the restraint order passed on June 5, 2014, shall come to an end and the appellant will be entitled to access the Indian securities market,” it said.