Insider Trading: SEBI bans 14 people including ED of Lux Industries; stock hits 20% lower circuit
The market regulator has imposed restrictions on the people involved in the matter by issuing an interim order, Zee Business Deputy Bureau Chief Brajesh Kumar explains in a report.
The shares of Lux Industries on Tuesday closed at a lower circuit of 20 per cent to Rs 2808.45 per share, as the market regulator Securities and Exchanges Board of India (SEBI) banned 14 people, including the Executive Director of the company, from trading amid insider trading case.
The market regulator has imposed restrictions on the people involved in the matter by issuing an interim order, Zee Business Deputy Bureau Chief Brajesh Kumar explains in a report.
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In the insider trading case, SEBI banned 14 people, including the company’s executive director Udit Todi. The ban on all 14 people will continue till further orders of SEBI, Brajesh Kumar tells further.
He added, “SEBI accused Todi of leaking results to father-in-law Sanjeev Bubna. The market regulator has also alleged that inside information about company results was revealed, through which profit of Rs 2.94 crore was made illegally and this will also be forfeited by the regulator.”
The regulator has charged these 14 people for sharing inside information of March 2021 quarterly results, the deputy bureau editor said in report.
Brajesh further explained that the fourth-quarter earnings of the company were released on May 25, 2021 and the stock had registered a surge of 40.75 per cent in the three days.
On investigation, SEBI found that there were deals of connected parties, wherein buying of shares by connected parties from May 21, 2021. Similarly, SEBI derived that the information was passed from Udit Todi to Avni Todi then to Sanjeev Bubna, Zee Business report states.
The market regulator started the scrutiny of deals after it received an alert on its system, which includes call data records, social media profiling among others aided the market regulator for further investigation, the deputy bureau editor further added.
How SEBI Handles Insider Trading?
-SEBI’s system generates alerts on abnormal trading and then deals are scrutinized, buyer, seller search. It is then seen if there is any connection with those who had the information.
Call data record for connection, and check social media profile, moreover, checking is also done through trading history from bank accounts and demat.
06:31 PM IST