sebi:EAD/PM-AA/AO/7/2018-19

SEBI · SEBI · 2017-12-14 · Prasanta Mahapatra, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Show Cause Notice disposed of without imposition of any penalty

Provisions invoked

• s. 15I
• s. 15G

Regulations

• Reg. 199
• Reg. 3
• Reg. 3(i)
• Reg. 2
• Reg. 12(2)

Parties

• Pradeep Kumar Mishra

Holding

The alleged violation of Regulation 3(i) of the PIT Regulations, 1992 by Shri Pradeep Kumar Mishra was not established, and the Show Cause Notice was disposed of without imposition of any penalty.

Full text

Adjudication Order in respect of Pradeep Kumar Mishra in the matter of MCX Page 2 of 8 days and impending payment defaults by the members of NSEL and loss of reputation of Promoters and Management of MCX. It was observed that any news impacting business of NSEL will automatically impact share price of its holding company (i.e. FTIL) and associate companies (i.e. MCX) and any news impacting credentials of Promoters and Management of FTIL, NSEL and MCX will also impact the share price of MCX, therefore suspension of trading by NSEL was a negative news. As per the Investigating Authority, the UPSI came into existence on April 27, 2012, upon the issuance of the SCN to NSEL by the DCA and it ceased to exist when NSEL suspended trading in all contracts (except e-series contracts) and deferred settlement of all pending contracts on July 31, 2013.

Adjudication Order in respect of Pradeep Kumar Mishra in the matter of MCX Page 3 of 8 1992 read with Regulation 12(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as “PIT Regulations, 2015”). APPOINTMENT OF ADJUDICATING OFFICER

Adjudication Order in respect of Pradeep Kumar Mishra in the matter of MCX Page 4 of 8 on 8th March 2013 after that I became eligible to sell into the market as per regulation.  My action of selling of MCX shares was carried out after completion of regulatory restrictions on selling of the ESOPs stock and to meet my personal financial requirements. My intent of selling MCX shares were to realize the value of the investment which was acquired through legal manner and to meet the financial obligations & necessary household expenses  The business, functioning and management of MCX and NSEL were separate though FTIL being common promoter. Apart from above, I was not one of the KMPs in NSEL  During this alleged "investigation period", that is April 2012 to July 2013, I was working in NSEL and had no direct or indirect relation with MCX. Hence, I am not an "insider" with respect to MCX under the provisions of SEBI (Prohibition of Insider Trading) Regulations, 1992.  SCN issued to NSEL was not the verdict from DCA and hence, it did not have any predictable implications even after if it came in public knowledge on 3rd October 2017. Hence, it does not qualify to be a Price Sensitive Information, neither in letter nor in spirit nor in terms of Regulation 2 (ha) of the SEBI PIT Regulations, 1992. Had it been price sensitive information, the prices of MCX scrips should have reacted negatively on this report. But in reality it did not happen like that.  NSEL had published and dissemi

Source: SecMarx — sebi:EAD/PM-AA/AO/7/2018-19. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.