The Supreme Court set aside SEBI's insider-trading orders against PC Jeweller's managing director and his relatives, holding that Regulation 3 of the PIT Regulations creates no deeming fiction: the communication of unpublished price-sensitive information must be proved by cogent material — letters, emails, witnesses — not inferred from family proximity or the timing of trades. Estranged, financially-independent relatives are not 'connected persons' or 'immediate relatives'.
The Securities Appellate Tribunal set aside SEBI penalties against people who forwarded company financial figures on WhatsApp shortly before official announcements. Information becomes unpublished price sensitive information only when the person circulating it knew that it was both unpublished and price sensitive, and SEBI failed to prove that knowledge on a preponderance of probabilities.
The Supreme Court holds that mere possession of unpublished price-sensitive information is not insider trading: profit motive is essential, and a loss-making distress sale to save a firm is no wrong.
SEBI Whole-Time Member Kamlesh C. Varshney finds the former Executive Chairperson of Religare Enterprises guilty of insider trading in REL shares sold 21-22 September 2023 in possession of UPSI of the Burman Group's 25 September 2023 open offer; orders ₹1.99 crore disgorgement with 12% interest, ₹40 lakh penalty, and a two-year market-access restraint.