9th Jan 18: Sebi considered news article to acquit ex-MCX officials of insider trading charges

Mumbai: The Securities and Exchange Board of India’s Friday order revoking penalties and trading restrictions on seven people accused in a case of insider trading in the stock of Multi Commodity Exchange Ltd (MCX) has an interesting side note: The markets regulator considered a news article published in a business daily to classify the information as public thereby ruling that the seven people did not trade on the basis of inside information. Lawyers fear that this wide definition of public information could set a bad precedence.

On 2 August, Sebi had passed an interim order against former and current MCX and Financial Technologies India Ltd (FTIL) employees alleging that they traded in the stocks of FTIL and MCX based on inside information and averted losses of Rs85 crore. The order said that the unpublished price sensitive information was a department of consumer affairs showcause notice issued to National Spot Exchange Ltd on 27 April 2012 threatening its suspension.

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