SAT dismisses Top Class Capital appeals against Sebi orders in insider trading case

The Securities Appellate Tribunal (SAT) has dismissed appeals filed by Top Class Capital Markets against Sebi directives that barred the stock broker from the securities market and directed it to disgorge Rs 3.78 crore in the case of alleged insider trading in Aurobindo Pharma Ltd. Dismissing the appeals, SAT, in its order on Tuesday, said "the appellant (Top Class Capital Markets) has traded and purchased the shares of Aurobindo Pharma when in possession of UPSI (Unpublished Price Sensitive Information)".

The appeals were filed against two orders passed by Sebi, whereby it had imposed a penalty of Rs 7.5 crore on Top Class Capital in September 2019 and through another order in August 2020, the regulator restrained the entity from the securities market for one year and for three years in dealing with the shares of Aurobindo Pharma Ltd. In addition, Sebi had directed the broker to disgorge an amount of Rs 3.78 crore as a notional profit with interest at the rate of 12 percent per annum.

Pursuant to the orders passed by Sebi, Top Class Capital moved to SAT. Sebi, in its order, had found that Top Class Capital traded and purchased the shares of Aurobindo Pharma during July 22, 2008 to March 3, 2009, when in possession of UPSI related to certain licensing and supply agreements entered between Pfizer and Aurobindo Pharma. In the process, Top Class Capital made a notional profit of Rs 3.78 crore.