The Tax Publishers 2022 TaxPub(CL) 2833 (SAT- Mum) : (2022) 173 SCL 0556 SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
Section 15T
Where appellant indulged into front running of managing director and earned wrongful gain, which was in violation of SEBI Act or in PFUTP Regulations, WTM rightly directed the appellant to disgorge wrongful gain made by him along with simple interest, the appeal against the order of WTM was dismissed.
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Appeal to the Securities Appellate Tribunal - Appeal against direction to disgorge wrongful gain with simple interest - Appellant indulged into front running and earned wrongful gain - Whether front running is in violation of SEBI Act or PFUTP Regulations
SEBI found that appellant, who was working as executive finance with company, received information from managing director of the company in respect of scrips. Therefore, the appellant had indulged into front running of the managing director. Whole-Time Member of the SEBI directed the appellant to disgorge wrongful gain made by him along with simple interest. The appellant filed an appeal against the order on the ground that front running was nowhere defined either in the SEBI Act or in PFUTP Regulations. Held: Definition of fraud is wide enough which covers various kind of trades which are non-genuine and manipulative like synchronized trades, self-trades etc. Intent of the appellant while trading in the specific shares was not to secure beneficial ownership of the respective scrips but to gain from the information received by him in trust. In the result he contributed to the volume of trading. Therefore, this Tribunal does not agree with the proposition of the appellant that the front running is not a violation of any regulation. Thus, the appeal was dismissed.
REFERRED : Securities and Exchange Board of India v. Kanaiyalal Baldevbhai Patel (2017) 144 SCL 5 : 2017 TaxPub(CL) 0682 (SC)
FAVOUR : Against the appellant
A.Y. :
IN THE SECURITIES APPELLATE TRIBUNAL, MUMBAI BENCH
JUSTICE TARUN AGARWALA, PRESIDING OFFICER M.T. JOSHI, JUDICIAL MEMBER & MEERA SWARUP, TECHNICAL MEMBER
Kamal Jitendra Katkoria v. SEBI
Appeal No. 299 of 2018
9 June, 2022
Appellant by: J.J. Bhatt, Rinku Valanju, Pratham Masurekar, Sumit Yadav, Hetal Joshi, Aditya Shah, Jheel Thakkar and Karan Asrani, Advocates
Respondent by: Gaurav Joshi, Sr. Advocate, Mihir Mody, Arnav Misra and Mayur Jaisingh, Advocates
M.T. Joshi, Judicial Member
Aggrieved by the order of the learned Whole Time Member (hereinafter referred to as 'WTM') of the respondent, Securities and Exchange Board of India (hereinafter referred to as 'SEBI') dated 8-5-2018 directing the appellant to disgorge the wrongful gain made by him of Rs. 37,99,818 along with simple interest @ 12% per annum till the date of payment, the present appeal is preferred.
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