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The Securities and Exchange Board of India has castigated two people for, allegedly, sharing sensitive information. The two individuals shared a price sensitive unpublished information which was linked to the script of three entities that were listed i.e. Wipro Ltd., Mindtree Ltd. and Asian Paints Ltd. Such information was shared in various WhatsApp groups even before the official announcement was made.
Looking into the matter and investigating the same, SEBI proposed a penalty of Rs. 45 lakh and Rs. 15 lakh on Shruti Vora and Parthiv Dalal, respectively. These two individuals have been working with Antique Stock Broking, in their sales team.The SEBI Act prohibits the insider trading and release of non public information to authorised people beforehand. The two individuals had committed the act that falls under the same bracket, as per the investigation conducted by SEBI.
The case dates back to November 2017, when the media reports stated that the price sensitive information in regard to 12 prestigious companies was doing rounds on the WhatsApp groups. At the time of this investigation, the market regulator had sought details of the employees and seized their phones to check for their involvement in such a sensitive matter. In the investigation and inquiry conducted by SEBI, it found out that the sensitive information regarding the their quarter earnings of the three listed companies was leaked before it’s official disclosure to the general public. They, in spite of technological limitations, found the same in Vora’s phone. Vora argued that the information circulated by her was ‘heard on the street news’ and does not come from any listed entities. Since the original source of the leak was uncertain, the information shared by her did not classify as unpublished sensitive information.
After various developments in the case, the individuals in a WhatsApp group were classified as insiders and strict restrictions on communication of unpublished information was established. It can further be concluded that if these orders remain unchallenged, it shall have huge impacts on the freedom of speech and expression on the people
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