Insider Trading Settlement: Rs 74 Lakh Paid to Sebi
Two people, including a former Deloitte India employee, recently resolved a case with the Securities and Exchange Board of India (Sebi) by paying Rs 74 lakh in settlement fees. Nimai Parekh and Rahil Dalal opted to settle the matter without admitting or denying the findings of fact and conclusions of law, according to Sebi.
Sebi’s whole-time member Kamlesh C Varshney issued a settlement order stating that any potential proceedings related to the violations have been settled for the applicants under the settlement regulations.
An investigation was conducted by Sebi into the trading of HDFC Ltd and HDFC Bank Ltd securities to determine if any entities engaged in suspected insider trading based on information about a merger. The investigation period covered November 2021 to April 2022.
Sebi noted that HDFC and HDFC Bank announced the merger to the exchanges before market hours on April 4, 2022. Parekh, who was part of Deloitte’s valuation team appointed by HDFC Bank as the valuer for the merger, had access to information about the merger since March 29, 2022.
The regulator considered the information about the merger to be Unpublished Price Sensitive Information (UPSI) with the UPSI period from December 13, 2021, to April 4, 2022. It was found that Dalal, a close friend of Parekh, was also considered an insider in terms of insider trading norms.
Dalal was found to have reasonable access to UPSI through Parekh and was talking frequently to him. Sebi alleged that Parekh had communicated UPSI to other applicants, including Dalal, in violation of insider trading norms.
Dalal was found to have shared the UPSI with his father, further violating rules. Parekh and Dalal submitted revised settlement terms after receiving the settlement application, which were approved by Sebi’s High Powered Advisory Committee (HPAC).
After paying Rs 39 lakh and Rs 35 lakh respectively, Parekh and Dalal settled the case with Sebi.
