A man is being investigated by the stock market regulator SEBI with ragards irregularities and insider trading in Hindustan Aeronautics Limited’s (HAL) share. The accused has responded to the regulator with abusive language and, oddly, an unrelated YouTube video link.
In an order dated June 7, the Securities and Exchange Board of India (Sebi) imposed a fine of Rs 20 lakh on Rajat Mishra. The penalty was due to Mishra’s obstruction of the investigation and his demonstrated “callous attitude” and “complete disregard” for the regulatory authority.
Hindustan Aeronautics Limited (HAL) informed the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on June 8, 2023, about a board meeting scheduled for June 27, 2023, to consider a stock split. Following this announcement, HAL’s stock price opened at Rs 3,609 and closed at Rs 3,732.9 on June 9, 2023, marking a significant increase from the previous day’s close of Rs 3,527.40.
The Securities and Exchange Board of India (SEBI) investigated Mr. Mishra’s trades from March 1, 2023, to August 10, 2023. The investigation revealed that Mr. Mishra purchased 7,250 shares during the unpublished price-sensitive information (UPSI) period, sold only 100 shares during the UPSI, and sold the remainder of his holdings just after the UPSI period, when the stock price had significantly increased.
READ MORE: Actor Noor Malabika Das Found Dead, Police Suspects Suicide
According to the order, by selling the shares immediately after the UPSI period, Mr. Mishra earned a profit of Rs 28.9 lakh.
Despite multiple attempts by SEBI to obtain information from Mr. Mishra, he failed to comply. Requests for details about his trading activities, sent via emails and summonses, went unanswered. Instead, Mr. Mishra provided irrelevant responses, including a YouTube video link, and failed to appear for scheduled hearings or video calls.
Subsequently, the regulatory body issued a hearing notice via digitally signed email on May 28, 2024. In response, Mishra sent an email dated May 31, 2024, inquiring “Notice de rxxe ho ya bxxxk mxxxg rxxe ho”.
The non-compliance, which included ignoring emails and summons, led the AO to conclude that Mr. Mishra obstructed the investigation. “His trading activities during the UPSI period and subsequent non-cooperation suggested insider trading. The investigation could not definitively prove UPSI’s communication due to Mr Mishra’s lack of cooperation,” the AO says.
SEBI found Mr. Mishra in violation of Sections 11C (2), 11C (3), and 11C (5) of the SEBI Act, 1992, which require the preservation and production of relevant documents and appearance before the investigating authority (IA). Mr. Mishra’s actions obstructed the investigation process, according to the market regulator.
