Facebook friends may be treated as connected persons for the purposes of Insider Trading: SEBI

This article gives an analysis of the latest SEBI's order on Insider Trading especially it is a case concerning Promoters of a listed company and persons connected with them who have allegedly engaged in insider trading. SEBI has chosen the social media 'Facebook' to determine and to establish connection between the parties who have committed Insider Trading.

1. Introduction

Securities Exchange Board of India (SEBI) had originally framed SEBI (Prohibition of Insider Trading) Regulations, 1992 in order to deter the practice of insider trading in the securities of listed companies. Afterwards several amendments to the said Regulations and also judicial paradigm through various case laws had also evolved to prohibit insider trading. But major overhaul of the Regulations have not been done. But SEBI on 15^th January, 2015 had notified SEBI (Prohibition of Insider Trading) Regulations, 2015 [Regulations 2015] and has been done in order to strengthen the legal and enforcement framework, toughen the insider trading rules, align Indian regime with International practices and to provide clarity to certain definitions and concepts.

Surveying authority can’t allege excess stock without demanding standard weighment facility from assessee

Facts

a)  Surveying authority conducted survey at premises of assessee and alleged excess stock by weighing stock on basis of cartons. Consequently, the Assessing Officer (AO) made addition on account of excess stock.

b)  Assessee challenged that no addition could made on account of excess stock as weighment was not done by the surveying authority in accordance with the provisions of the Standards and Weights and Measures Act, 1976.

c)  CIT(A) upheld the addition made by the AO by observing that there was no evidence that the assessee provided to the survey team the necessary facility of weighment by a standardized scale.

d)  Aggrieved by the order of the CIT(A), assessee filed the instant appeal before the tribunal.