Case Law Details
SEBI Vs. Abhijit Rajan (Supreme Court of India)
Introduction: In a significant judgment on insider trading, the Supreme Court of India delivered a ruling in the case of Securities Exchange Board of India (SEBI) v. Abhijit Ranjan. This ruling addresses the crucial test for establishing insider trading, focusing on whether the insider sought to gain from unpublished price sensitive information (UPSI).
ABSTRACT
In a landmark decision on insider trading, the Supreme Court of India (“Supreme Court”) held in Securities Exchange Board of India (“SEBI”) v. Abhijit Ranjan (“Respondent”) that the critical test for establishing a charge of insider trading is whether the ‘insider’ attempted to profit or gain from unpublished price sensitive information (“UPSI”).
Differentiating among mens rea and profit motive, the Supreme Court held that, while mens rea is not an essential requirement in matters governed by the SEBI (Prohibition of Fraudulent and Unfair Trade Practices in the Securities Market) Regulations, 1995, the test to be applied in matters governed by the SEBI (Prohibition of Insider Trading) Regulations, 1992 (“PIT Regulations”) is that of profit motive, i.e., whether the insider’s action
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