Documents leak: SEBI says probing complaints of insider trading

Amid multiple agencies probing alleged leaks of secret documents from various ministries, SEBI today said it is looking into complaints of such information having been used for insider trading in stocks.

SEBI Chairman U K Sinha said that complaints have been received and investigations are continuing into the matter but it will take some time for those to be completed.

“I will say that we have received one or two complaints, not too many complaints, where allegations have been made that this information was used for trading as well. This is a one off information,” Sinha said here.

He was responding to a query on whether the regulator is looking into cases where leaked documents were used for insider trading in the stock markets.

If there is any insider trading, it becomes a SEBI issue, he said.

“SEBI will take its own time to monitor that, to investigate that because investigating these things will take its own time.

“I am not telling that we are immediately going to do something but the information that has come to us we are looking into it...,” Sinha told reporters after its board meeting.

The Delhi Police as well as the CBI are probing alleged leak and sale of secret government documents at various ministries. In this regard, officials and corporates have come under the scanner and some individuals have also been detained.

SEBI started looking into suspected use of such information for insider trading in stocks through a nexus between CAs, brokers and market operators, sources had said.

It began last month after a Delhi Police crackdown on a suspected ‘corporate espionage’ case involving some corporate executives, consultants and a few junior-level staff at the Petroleum Ministry.

SEBI has expanded the scope of its probe after the latest CBI action in similar cases relating to leak of classified documents from other government departments, including in the Finance and Commerce ministries, wherein names of some large corporate houses have also cropped up, sources had said.

Among others, the watchdog is looking into whether such leaks were used to manipulate share prices of listed companies, including by the Chartered Accountants, consultants, brokers and even the company promoters and executives.

Depending on the progress of the inspection, which involves analysing trading and share price trends in a host of private and public sector companies, including from energy, banking and pharmaceutical sectors, further action would be initiated by SEBI, sources had said.

Those found to have traded on the basis of stolen information from government offices would be probed under recently revised Insider Trading Regulations, as also under the Prevention of Fraudulent and Unfair Trade Practices (PFUTP) norms, followed by stern penal actions.

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