Insider trading in IEX stock: CERC starts probe, sends 3 officials on leave

We have taken immediate cognizance of the alleged insider trading related to market coupling, says CERC

The Central Electricity Regulatory Commission (CERC) on Thursday sent three of its officials on compulsory leave, after they were named in an interim order from Sebi in an insider trading case involving individuals making unfair gains of ₹173 crore based on critical policy information from these high-ranking CERC staffers. The regulator, with a key role in India’s power sector, has also set up a committee to gather further evidence in the matter and take suitable action. 

“The Sebi order is interim, and does not represent final findings. However, since in the order, Sebi has prima facie observed that the policy information originated from CERC ahead of the publication of the order on 23rd July, 2025, CERC has instituted a fact-finding committee to examine the related evidence and take appropriate action. The concerned officers (three) have been sent on compulsory leave for the meantime,” the regulator said in a statement shared with Business Standard. 

 

“The Commission has taken immediate cognizance of the alleged insider trading based on unpublished price-sensitive information (UPSI) related to the market coupling policy from CERC,” it said. 

The Sebi order stated that the eight individuals allegedly involved in insider trading were in touch with a senior official named Yogeita S Mehra from CERC in a personal capacity. Another CERC official named Gagan Diwan, part of the division involved in the market coupling announcement, shared information to the individuals, according to the order. 

In its interim order on Wednesday, Sebi had barred these individuals from the market and directed the disgorgement of illegal gains from alleged insider trading in the Indian Energy Exchange (IEX) scrip. The CERC said it had received the ex-parte interim order from Sebi in the matter of insider trading by certain entities in the IEX scrip on Wednesday. 

The power regulator also said it has upheld the confidence and trust of the stakeholders in the regulatory process for more than 25 years and will continue to maintain the same. 

Sebi had initially conducted a suo-motu preliminary examination in the matter, taking cognisance of the significant fall in IEX’ share price after the CERC made an announcement on 23 July. Amidst this probe, Sebi also received a complaint alleging insider trading in the scrip, and since there were reasonable grounds to believe that some entities traded in IEX on the basis of prior knowledge of unpublished price sensitive information, it appointed an Investigating Authority on 12 September to scrutinise trades between July 01 to August 14. 

Sebi’s probe revealed that the information in the CERC’s 23 July order pertained to market coupling and this information was bound to have an impact on the pricing of the securities of IEX since the market coupling mechanism aggregates buy and sell bids from multiple exchanges and uses a central system, to determine a single, uniform market clearing price.