Sebi bans individual from securities market for insider trading in Divis Laboratories shares

Sebi bans individual from securities market for insider trading in Divis Laboratories shares

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Sebi on Friday imposed a one-year ban from the securities market and a fine of Rs 11 lakh on an individual for insider trading activities in the shares of Divi’s Laboratories in 2017.
Besides, the individual, Srinivas Maddineni, has been directed not to deal in the shares of the company for two years. Also, he has been asked to disgorge wrongful gains of Rs 1.83 lakh along with 12 per cent annual interest.

The interest would be applicable from July 10, 2017, till the date of actual payment of the disgorgement amount, according to an order.

The watchdog had conducted an investigation into suspected insider trading activities of certain entities in the shares of Divi’s Laboratories during the July 7-10, 2017 period.

On July 10, 2017, the company had made an announcement during market hours about the US Food and Drug Administration was to lift import alert regarding one of the company’s unit in Visakhapatnam.

This was an Unpublished Price Sensitive Information (UPSI) till it was disclosed to the stock exchanges.

The individual had bought 4,000 shares of Divi’s Laboratories on July 10, 2017 and around two-and-a-half hours later, a disclosure regarding the USFDA removing the import alert was made by the company, as per the order.

He was an Assistant General Manager in the Environment, Health and Safety Department and a designated person at the company during the UPSI period, Sebi said.

Among others, Sebi said the individual had also failed to make disclosures regarding certain trades during July 10-18, 2017.

Passing the order, Sebi has restrained the individual from “accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of one year”.

Further, he has been prohibited dealing in the securities of Divi’s Laboratories, directly or indirectly, in any manner for two years.

Credit: Stocks-Markets-Economic Times

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