The SEC has sought the following:
- Permanently restraining and enjoining the brokers from violating the anti-fraud provisions of the securities statutes.
- Disgorgement and prejudgment interest.
- Civil monetary penalties
Separately, the Department of Justice announced its criminal action against the brokers.
Unlike the US SEC, the Indian regulator has no power to approach a civil court seeking injunctions or other useful remedies. As it seems to have no locus to file a civil suit, it is hobbled in its enforcement to only administrative remedies rather than a combination of administrative and civil remedies. There is clearly a need to amend the SEBI Act 1992 and provide this additional remedy to the regulator.
2 comments:
hi
could you please elaborate on this a little bit - the sebi act does give sebi the power issue various directions as also to levy penalties of rs.1 crore/Rs.25 crore, as maybe the case. what & why are the additional civil remedies required?
The clearest example is persons issuing bogus/fake shares. As a void/illegal contract has to be declared as void by a court of law - rather than SEBI, which cannot so declare - SEBI is stuck with its own lack of power and also an inability to go to court to get such a declaration. There are many other examples, like powers of injunctions, but I think this will give the idea of the possibilities. Civil orders (court orders) also introduce the concept of objectivity into the process of enforcement, though may be much slower.
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