Securities and Exchange Board of India (SEBI) Issues Adjudication Order Against Naresh Kumar Agarwal
The Securities and Exchange Board of India (SEBI) has issued an adjudication order against Naresh Kumar Agarwal for violating the Prohibited Securities Trading Regulations.
The order was passed on May 12, 2023, and found that Agarwal had indulged in fraudulent and unfair trade practices in the trading of Indian Depository Receipts (IDRs) on the Bombay Stock Exchange (BSE).
Agarwal was found to have created multiple trading accounts in the names of his family members and friends and used them to artificially inflate the price of IDRs. He also used these accounts to sell IDRs at a higher price to unsuspecting investors.
As a result of Agarwal’s actions, the price of IDRs was artificially inflated and investors were misled into buying them at a higher price.
SEBI has imposed a penalty of Rs. 1 crore on Agarwal and directed him to disgorge the illegal gains of Rs. 50 lakh. He has also been barred from trading in securities for a period of three years.
This is the second time that SEBI has taken action against Agarwal for violating the Prohibited Securities Trading Regulations. In 2018, he was fined Rs. 5 lakh for indulging in similar activities.
SEBI has warned Agarwal that if he repeats the offence, he will be liable for more severe penalties.
The order is a reminder to all investors to be careful when trading in securities and to do their due diligence before investing. It is also a warning to market intermediaries to comply with the securities laws and regulations.
Here are some of the key takeaways from the order:
- SEBI has taken action against Naresh Kumar Agarwal for violating the Prohibited Securities Trading Regulations.
- Agarwal was found to have indulged in fraudulent and unfair trade practices in the trading of Indian Depository Receipts (IDRs) on the Bombay Stock Exchange (BSE).
- Agarwal was found to have created multiple trading accounts in the names of his family members and friends and used them to artificially inflate the price of IDRs. He also used these accounts to sell IDRs at a higher price to unsuspecting investors.
- As a result of Agarwal’s actions, the price of IDRs was artificially inflated and investors were misled into buying them at a higher price.
- SEBI has imposed a penalty of Rs. 1 crore on Agarwal and directed him to disgorge the illegal gains of Rs. 50 lakh. He has also been barred from trading in securities for a period of three years.
- This is the second time that SEBI has taken action against Agarwal for violating the Prohibited Securities Trading Regulations. In 2018, he was fined Rs. 5 lakh for indulging in similar activities.
- SEBI has warned Agarwal that if he repeats the offence, he will be liable for more severe penalties.
The order is a reminder to all investors to be careful when trading in securities and to do their due diligence before investing. It is also a warning to market intermediaries to comply with the securities laws and regulations.
