Poor disgorgement could mar Sebi's reward scheme to curb insider trading

Under the scheme, the monetary reward will be 10% of the amount disgorged by the wrongdoer or Rs 1 crore, whichever is lower

The Securities and Exchange Board of India (Sebi) has devised a scheme to nab those involved in insider trading, by announcing  a reward of up to Rs 1 crore to informants. 

However, the regulator’s poor disgorgement track record could be an impediment for the so-called informant mechanism. Under the scheme, the monetary reward will be 10 per cent of the amount disgorged by the wrongdoer or Rs 1 crore, whichever is lower.

While Sebi has passed disgorgement orders worth thousands of crores, the actual amount collected remains miniscule. Moreover, a lot of cases continue to remain stuck in the judicial process.