Lawstreet Journal

SEBI penalizes individual for releasing price sensitive information: WhatsApp Leak Case

Lawstreet Journal 17 Jun 2020 9:50pm

Image courtesy: Lawstreet Journal Executive SEBI penalizes individual for releasing price sensitive information: WhatsApp Leak Case

On Monday (June 15, 2020), market regulator SEBI penalized an individual after he was found guilty of releasing unpublished price sensitive information related to financial results of Asian Paints through WhatsApp messages before the official announcement by the company.

A penalty of ₹ 15 lakh has been imposed on the said individual - Neeraj Kumar Agarwal.

A few news reports referred to the circulation of Unpublished Price Sensitive Information (UPSI) in various private WhatsApp groups about some companies before their official announcements to the respective stock exchanges.

Regarding this, SEBI had initiated a preliminary examination during which search and seizure operation against 26 entities of a WhatsApp group were conducted, and around 190 devices and records, among others, were seized.

The chats extracted from seized devices were examined further and it was found that earning data and other financial details of about 12 companies were leaked through WhatsApp.

Asian Paints was one of the firms whose quarterly financial reports closely matched with the messages in the WhatsApp chats. 

An investigation was carried out regarding the matter of circulation of UPSI through WhatsApp messages related to Asian Paints to ascertain any possible violation of the PIT (Prohibition of Insider Trading) Regulations in March-May 2017.

In the probe conducted by SEBI, it was found that Agarwal communicated the UPSI related to total income, EBITDA, and profit after tax of Asian Paints for the quarter ending March 2017 through WhatsApp messages.

The financial figures of Asian Paints that were circulated through WhatsApp closely matched with those subsequently revealed to the exchanges… Continue Reading...


Tagged: SEBI   Securities and Exchange Board of India (SEBI)  
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