Fraud tag on small trades: Sebi moves SC

The legal battle over the interpretation of certain fraudulent trade rules has reached the apex court. Market regulator, the Securities and Exchange Board of India (Sebi), has moved the Supreme Court in nearly a dozen cases.

- Pavan Burugula

The key question is whether trading a tiny portion of a company's shares leads to fraudulent trading.

Securities Appellant Tribunal (SAT), which hears appeals against Sebi, had set aside Sebi orders in cases related to GGF Mercantile, Maltiben Gandhi, Sanjay Poddar HUF, among others, as the accused bought or sold only a small number of shares. In some cases, SAT also said Sebi failed to establish any strong connections between the accused and a larger ring of traders manipulating stocks.

The apex court admitted the cases in August and have set up aatwo-Judge bench, comprising Justices Sanjiv Khanna and SVN Bhatia, to hear the cases in October.

Email queries to Sebi didn't elicit an answer till press time.