Sebi's probes spike, yet turn exhaustive to survive SAT glare

India's capital markets regulator is opening more investigations than ever, even as it focuses on building detailed, watertight cases to survive increasing scrutiny at the appellate tribunal.

- Apoorva Ajith

The Securities and Exchange Board of India (Sebi) took up 400 investigations and completed 301 in the financial year 2024-25 (FY25), according to data from Sebi's Handbook of Statistics for the year. That compares with 342 fresh probes and 197 completed in FY24, and 144 new investigations and 152 finished in FY23.

While the number of probes completed has risen in absolute terms, the regulator is opening far more new investigations since the fiscal 2024. The use of technology, and artificial intelligence (AI) in particular, is enabling Sebi to track more cases.

The regulator has also expanded its investigations wing and is learning from cases that are being held up or overturned at the appellate tribunal.

"Sebi investigations are becoming more watertight and thorough," said KC Jacob, partner at Economic Laws Practice.

"It is asking for a lot more things in their notices."

That is evident in Sebi's recent orders. In the Avadhut Sathe case, the regulator issued a 125-page interim order. It analyzed video recordings of Sathe's trading lessons, reproduced screenshots of sessions with date-wise details and verbatim statements, examined WhatsApp chats, and scrutinised the trading accounts of investors advertised as success stories. Sebi also analyzed the social media influencer's own trading records to show that he and his firm were incurring losses, undermining claims that he was in a position to Sebi barred Sathe and his firm from the securities market and asked them to deposit the alleged illegal gains of %546 crore into an account, with a lien marked in favour of Sebi.