Unpublished Price Sensitive Information claim failed where messages were personal and trading conduct supported ordinary investment activity.

WhatsApp messages limited to family and matrimonial exchanges did not show any discussion of trading or confidential corporate information, so they could not support an inference of insider trading. A single telephone call, without reliable corroboration, was held insufficient to prove communication of unpublished price sensitive information. The trader's pattern of investments across several sectors and multiple scrips during the relevant period supported the explanation that he was acting as a sector-agnostic investor in the ordinary course of business. On that material, the allegation that the shares were purchased on the basis of unpublished price sensitive information was not established, and the adverse finding could not be sustained.

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Issues: Whether the appellant's purchase of shares was based on unpublished price sensitive information allegedly communicated by the co-appellant, and whether the impugned finding of insider trading could be sustained on the material relied upon.

Analysis: The WhatsApp exchanges between the appellants were confined to family and matrimonial interactions and did not indicate any discussion of trading or sensitive corporate information. The solitary telephone call relied upon by the regulator, by itself, was held insufficient to establish communication of unpublished price sensitive information. The appellant's trading pattern showed investments across several sectors and significant purchases in multiple scrips during the relevant period, supporting the explanation that he was a sector-agnostic trader acting in the ordinary course of business. The surrounding circumstances, including the nature of the messages and the absence of any reliable material showing transmission of confidential information, did not justify the adverse inference drawn in the impugned order.

Conclusion: The allegation that the appellant purchased the shares on the basis of unpublished price sensitive information was not established, and the finding of violation could not be sustained.

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