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Sebi spares ex-MCX officials from insider trading action on lack of proof

Two former CEOs, Shreekant Javalgekar and Joseph Massey, among seven let off; separate order in respect of eighth person to face interim action in the matter

Press Trust of India  |  New Delhi 


Markets regulator has revoked its directions against seven former officials of Multi Commodity Exchange (MCX) as alleged violation of insider trading rules by them could not be established.

In August last year, had passed an interim order impounding averted losses totalling Rs 1.25 billion by alleged insider trading in shares of and its erstwhile promoter FTIL by 13 persons, including relatives of Jignesh Shah and former top executives, with 'prior information' about the NSEL case. This included eight persons accused of insider trading in shares.

The National Spot Exchange Ltd (NSEL), promoted by India Ltd (FTIL), had to suspend trading on July 31, 2013 after a major payment crisis broke out at the bourse. Subsequently, a number of regulators and enforcement agencies launched their probes into the NSEL case.

In its final order, the regulator has now revoked its directions against seven persons -- including two former CEOs and -- who had faced action for alleged insider trading in shares.

The orders against Shreekant's wife Asha Javalgekar, former NSEL Anjani Sinha, ex-director Paras Ajmera, Tejal Shah (FTIL director and relative of Jignesh Shah) and (a senior vice president at FTIL) have also been revoked.

said it will pass a separate order in respect of (a former director at NSEL), who was the eighth person to face Sebi's interim action in MCX matter.

In two separate interim orders passed on August 2, 2017, Sebi had said its investigations into alleged insider trading in shares of MCX and the erstwhile FTIL (which has now changed its name to 63 Moons Technologies Ltd) found that 13 persons "prima facie" traded in these stocks when in possession of 'unpublished price sensitive information'.

Finding them "prima facie guilty of insider trading", Sebi had said these persons were able to avoid any potential loss in MCX and FTIL shares and it was necessary to take steps for impounding and retaining the loss averted by them.

Following the order, the affected entities requested Sebi for inspection of documents, while seven of them (against whom orders have been revoked now) appealed before the against Sebi's directions.

The Tribunal subsequently asked Sebi to expeditiously pass final orders, among other directions, after looking at the objections and representations filed by them.

In its 58-page final order, Sebi said it accordingly provided opportunity to the affected parties to present their case.

Detailing the submissions made by all individuals, Sebi concluded that any violation of insider trading rules could not be established against Massey and Vaid, while the allegations levelled against also could not be established.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, January 06 2018. 20:30 IST