Imposition of cost of Rs 1 lakh by the Securities Appellate Tribunal on the market regulator, the SEBI, was not warranted, said the Supreme Court.
An investment advisor, Mathew Easow, had recommended purchase of shares by his clients while he himself had sold those very shares the same day. The SEBI moved in swiftly to haul him up on grounds of indulging in unfair trade practice, and slapped a penalty of Rs 20 lakh.
On appeal, the SAT not only upturned the SEBI order of holding the investment advisor guilty of unfair trade practice but turned the tables on it by imposing a cost of Rs 1 lakh on it ostensibly for its overreach.
The Supreme Court, to which the SEBI has gone on appeal, while keeping the substantive issue pending due to the death of one of the parties involved has, however, quashed the SAT verdict insofar as it related to cost on the SEBI.
(The author is a New Delhi-based chartered accountant)