Legal Wires
Legal Wires Series
A reader's guide to India's securities regulator.
A plain-English, citation-backed walk through how SEBI actually works: what it can do, how it proves its case, what its orders cost, and how its big precedents fit together. Every regulation, doctrine and landmark is linked to the article that explains it, so you can read in any order.
The doctrinal spine of the series. What SEBI's powers actually are, what it does with them, what it punishes, the difference between a penalty and a clawback, what disciplines the rupee figure, and what every listed company has to keep telling the market.
Sections 11 & 11B
SEBI does not have inherent regulatory authority. Every action traces to a section of the SEBI Act. What the regulator can compel, attach, freeze and disgorge.
Read the chapterThe Four Tracks
Whole-Time Member directions, Adjudicating Officer penalties, settlements, and appeals to the Securities Appellate Tribunal. Which one your matter takes shapes everything.
Read the chapterMarket Fraud
The PFUTP Regulations are SEBI's broad anti-fraud weapon. Their reach comes from how widely the Supreme Court has read the word fraud, from Kanaiyalal to Kishore Ajmera.
Read the chapterPenalty, Clawback, Refund
A penalty punishes, disgorgement claws back wrongful gains, and a refund restores investors. Three different SEBI remedies on three different provisions, each needing a different defence.
Read the chapterSection 15J
One sentence of the SEBI Act disciplines penalty discretion. The fight from Roofit to Bhavesh Pabari decided whether a regulatory penalty is arithmetic or judgment.
Read the chapterLODR
A listed company is in a permanent conversation with the market. LODR is the rulebook for that conversation, and the 2023 amendments significantly tightened the clock.
Read the chapterFrom the spine into specific regulatory regimes: when good information becomes insider trading, when an acquisition triggers an open offer, how cases settle without a finding, and how to read any SEBI order.
Insider Trading
The line is drawn by unpublished price sensitive information under the PIT Regulations 2015. After the Supreme Court's Balram Garg ruling, proving a case takes more than suspicious timing.
Read the chapterTakeovers
The SAST Regulations 2011 force an open offer at 25 per cent or on acquiring control. The thresholds, the creeping limit, and the unsettled meaning of control after Subhkam.
Read the chapterSettlement
Most matters end in settlement under Section 15JB and the 2018 Regulations, often without admitting or denying the findings. How it works and when to use it.
Read the chapterField Guide
A field guide to the anatomy of a SEBI order: show-cause notice, findings, evidence, directions, and how T. Takano lets you spot a weak order.
Read the chapterThe Supreme Court decisions that settled, or unsettled, the doctrines the rest of the series leans on. Each is read closely for what it actually held and what it changed in practice.
PFUTP · 2017
After Kanaiyalal, fraud under SEBI's anti-fraud rulebook is no longer about deceit. It is about effect: did the conduct induce someone to deal? That shift reshaped market-manipulation enforcement.
Read the chapterTakeovers · 2010
A minority investor's veto rights are not control. The SAT said so in Subhkam, the Supreme Court declined to settle it, and deals have been structured around the half-settled doctrine ever since.
Read the chapterFour matters that defined the modern enforcement record on financial-statement fraud, unlawful public issues, credit-event mispricing and promoter-led diversion. Each is read for what SEBI actually found and what the proceedings produced.
Accounting Fraud · 2009
Ramalinga Raju's 2009 confession exposed a 5,000-crore accounting fraud. SEBI's 2014 disgorgement order has been remanded and recalibrated for over a decade, and the doctrines it pushed into Indian law are still everywhere.
Read the chapterPublic Issue · 2012
Sahara's OFCDs raised vast sums from three crore investors in violation of public-issue norms. The Supreme Court's 2012 order to refund with 15 per cent interest is still being unwound thirteen years later.
Read the chapterCredit Ratings · 2018
SEBI's IL&FS enforcement was narrower than the headlines: the regulator's orders penalised ICRA, CARE Ratings and India Ratings for maintaining AAA ratings past visible balance-sheet stress.
Read the chapterNBFC Fraud · 2025
SEBI's 2025 order found that DHFL and the Wadhawans had diverted approximately 14,040 crore to "Bandra Book Entities" between 2006 and 2019. Five-year debarment, 120-crore penalty, disgorgement reserved.
Read the chapterFour matters that defined how SEBI polices the plumbing of Indian markets: the exchanges, the brokers, the promoter-side derivatives positions, and the cross-border capital-raising structures. Each chapter is read for what SEBI actually found and what survived appeal.
Exchanges · 2019
The case was widely treated as a 625-crore exchange-side disgorgement. The actual outcome was much narrower: SAT set it aside in 2023; SEBI dropped the charges in 2024 for absence of evidence; only OPG Securities was held to disgorge.
Read the chapterBrokers · 2019
SEBI's November 2019 ex parte order found Karvy had pledged client securities to raise funds for itself. The order changed broker discipline in India, including segregation of client securities and tighter rules on power of attorney.
Read the chapterDerivatives · 2007
SEBI says yes, by depressing RPL's settlement price in the closing window of 29 November 2007 to crystallise a gain on a connected short position. 447-crore disgorgement in 2017; SAT upheld it in 2020; the Supreme Court appeal is pending.
Read the chapterCross-Border · 2009 to 2012
A cluster of Indian listed companies issued GDRs not really subscribed by foreign investors. Vintage FZE, controlled by Arun Panchariya, funded subscriptions with a loan secured by the issuers' own GDR proceeds. SEBI debarred parties for up to ten years.
Read the chapterTwo matters where the failure of a financial institution put SEBI's disclosure, mis-selling and mutual-fund frameworks to the test in real time.
AT-1 Bonds · 2020
SEBI found 1,346 retail investors had bought roughly 679 crore of Yes Bank AT-1 bonds, many sold as "super FDs." Rana Kapoor penalised 2 crore in 2022. The 8,415-crore write-down challenge is reserved at the Supreme Court.
Read the chapterDebt Schemes · 2020
On 23 April 2020, Franklin Templeton wound up six debt schemes with 25,000 crore across 300,000 unitholders. SEBI's June 2021 order found scheme-categorisation lapses; 512-crore refund moderated to 250-crore escrow by SAT.
Read the chapterPieces that pair with the data study, taking the empirical record of 35,000-plus SEBI orders and reading what it says about how the regulator's pace and recovery patterns actually work.
Volume Curve
SEBI was quiet through the 1990s, expanded after the 2002 amendments, and became the modern enforcer after the Securities Laws (Amendment) Act, 2014. The four enforcement tracks now carry very different volumes.
Read the chapterRecovery Patterns
Often slowly, often shrunk on appeal, and rarely to the same investors who lost. Disgorgement flows into the IPEF, not direct compensation. Sahara has recovered about 61 per cent thirteen years on.
Read the chapterSettle vs Fight
Settlement under Section 15JB and the 2018 Regulations is available, but most matters do not settle. When the math favours closure, when it does not, and what the neither-admit-nor-deny feature is actually worth.
Read the chapterAppellate Odds
SAT is the busiest single voice in the record at roughly 15,363 orders. It modifies more than it overturns. What the modern pattern from Satyam to NSE to Franklin to RPL tells you about the cost and outcome of an appeal.
Read the chapterFour operational chapters for the lawyers, compliance officers and noticees who actually have to run the proceeding: how to handle an investigation summons, how SEBI does the disgorgement arithmetic, what a hearing actually looks like, and how to win a quantum reduction on appeal.
Investigation
Section 11C compels production of documents, information and personal attendance, with criminal exposure for non-compliance. How to comply intelligently while preserving the rights that survive into the show-cause stage.
Read the chapterDisgorgement Math
How SEBI actually calculates wrongful gain under Section 11B, why the figure is the part most exposed on appeal, and what the Satyam, NSE Co-location and Franklin shrinkages tell us about the inputs that matter.
Read the chapterThe Hearing
Section 15-I plus the 1995 Adjudication Rules: SCN, reply, personal hearing, written submissions, reasoned order. What each step does, and how Takano and Bhavesh Pabari shape what SEBI must put on the record.
Read the chapterSAT Appeal
The single most reliable lever on quantum is Section 15J non-engagement; Bhavesh Pabari settled the doctrine; T. Takano added a natural-justice flank. How to structure a SAT appeal that actually reduces the number.
Read the chapterA short note on how to read what you have just read.
Each chapter is written by hand to a question-led, citation-grounded standard rather than generated end-to-end. The underlying SEBI orders, regulations and judgments are verified before the chapter is written, not after.
Where SEBI findings or appellate holdings are described, they are recorded as the regulator's findings and, where applicable, as modified on appeal. Living individuals named in named-party matters are not asserted by Legal Wires; the underlying orders are cited.
If anything in any chapter is wrong, tell us. We will review and, where the correction is warranted, update the chapter and note the change. Email through the contact page or follow the correction link at the end of each chapter.