Insider trading disclosure defaults: SAT upheld penalty for failure to disclose share purchases by a promoter-director.

A promoter-director of a listed company purchased shares without making the disclosures required under Regulations 13(4) and 13(4A) read with Regulation 13(5) of the SEBI (Prohibition of Insider Trading) Regulations, 1992. The SAT noted that the issue was covered by its decision in a connected appeal involving another promoter-director of the same company and adopted the same reasoning. The penalty imposed under Section 15A(b) of the SEBI Act, 1992 was upheld, and the appeal was dismissed.

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Issues: Whether the penalty imposed for failure to make the mandated disclosures under the insider trading regulations was liable to be set aside.

Analysis: The appellant, a promoter-director of a listed company, had purchased shares but did not make the disclosures required under Regulation 13(4) and Regulation 13(4A) read with Regulation 13(5) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. The Tribunal noted that the matter was covered by its decision in the connected appeal involving another promoter-director of the same company and adopted the same reasoning.

Conclusion: The penalty under Section 15A(b) of the Securities and Exchange Board of India Act, 1992 was upheld and the appeal was dismissed.

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