Description

SEBI adjudication order against compliance officer for failure to disgorge profits from designated person's insider trading violations.

Summary

SEBI issued an adjudication order against Mr. Mukesh Kumar Nagar (PAN: BBVPN7577E), the compliance officer of AVG Logistics Ltd, for violating insider trading regulations. The order stems from an investigation into suspected insider trading in AVG Logistics scrip from September 1, 2023 to April 15, 2024, where a designated person Mr. Ankit Jain executed contra trades, and the compliance officer failed to ensure disgorgement of profits to the Investor Protection and Education Fund.

Key Points

  • Investigation period: September 1, 2023 to April 15, 2024
  • Mr. Ankit Jain (designated person) executed contra trades in AVG Logistics scrip
  • Mr. Mukesh Kumar Nagar (compliance officer) failed to disgorge profits earned by the designated person
  • Violation of Clause 10 of Minimum Standards for Code of Conduct under SEBI PIT Regulations 2015
  • Adjudicating Officer appointed on January 3, 2025
  • Show Cause Notice issued on January 10, 2025

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing SEBI (Prohibition of Insider Trading) Regulations, 2015.

Compliance Requirements

  • Compliance officers must ensure designated persons’ profits from prohibited trades are disgorged to Investor Protection and Education Fund
  • Strict adherence to Code of Conduct for monitoring and reporting trading by designated persons
  • Proper implementation of insider trading compliance mechanisms

Important Dates

  • Investigation Period: September 1, 2023 to April 15, 2024
  • Adjudicating Officer Appointment: January 3, 2025
  • Show Cause Notice Date: January 10, 2025
  • Order Date: August 7, 2025

Impact Assessment

This enforcement action reinforces SEBI’s strict stance on insider trading compliance and the responsibilities of compliance officers. It highlights the critical role of compliance officers in ensuring designated persons comply with trading restrictions and profit disgorgement requirements. The action serves as a deterrent for similar violations and emphasizes the importance of robust internal compliance mechanisms in listed companies.

Impact Justification

Enforcement action against compliance officer for regulatory breach, moderate market impact