A special court has directed the filing of a case against former SEBI chairperson Madhabi Puri Buch and five other officials over allegations of stock market fraud and regulatory lapses. The court has decided to monitor the investigation and has sought a status report within 30 days. The directive comes in response to a petition by journalist Sapan Shrivastava, who alleged serious violations that necessitate a thorough probe.

Special court judge Shashikant Eknathrao Bangar, in his ruling, stated that there is prima facie evidence of regulatory failures and possible collusion, warranting judicial intervention. The judge noted that the allegations reveal a cognizable offense, requiring an investigation in light of SEBI’s inaction and law enforcement agencies' failure to act.

SEBI, however, has dismissed the allegations and vowed to contest the order. It argues that the court acted on a "frivolous" petition without allowing the regulator an opportunity to present its side. The market regulator highlighted that the officials named were not in their respective positions at the time of the alleged violations. SEBI also pointed out that Shrivastava has a history of filing "frivolous and habitual" petitions, some of which were previously dismissed with penalties imposed.

Madhabi Puri Buch, who served as SEBI's first female chairperson, completed her three-year tenure on March 1. Under her leadership, SEBI implemented reforms such as faster equity settlements, increased foreign portfolio investor (FPI) disclosures, and improved mutual fund penetration through Rs 250 SIPs. However, the final year of her term saw controversy, culminating in the latest legal challenge.

SEBI has announced its intention to take "appropriate legal steps" to challenge the court’s directive, setting the stage for a legal battle over the regulator’s handling of stock market oversight.

A special court has directed the filing of a case against former SEBI chairperson Madhabi Puri Buch and five other officials over allegations of stock market fraud and regulatory lapses. The court has decided to monitor the investigation and has sought a status report within 30 days. The directive comes in response to a petition by journalist Sapan Shrivastava, who alleged serious violations that necessitate a thorough probe.

Special court judge Shashikant Eknathrao Bangar, in his ruling, stated that there is prima facie evidence of regulatory failures and possible collusion, warranting judicial intervention. The judge noted that the allegations reveal a cognizable offense, requiring an investigation in light of SEBI’s inaction and law enforcement agencies' failure to act.

SEBI, however, has dismissed the allegations and vowed to contest the order. It argues that the court acted on a "frivolous" petition without allowing the regulator an opportunity to present its side. The market regulator highlighted that the officials named were not in their respective positions at the time of the alleged violations. SEBI also pointed out that Shrivastava has a history of filing "frivolous and habitual" petitions, some of which were previously dismissed with penalties imposed.

Madhabi Puri Buch, who served as SEBI's first female chairperson, completed her three-year tenure on March 1. Under her leadership, SEBI implemented reforms such as faster equity settlements, increased foreign portfolio investor (FPI) disclosures, and improved mutual fund penetration through Rs 250 SIPs. However, the final year of her term saw controversy, culminating in the latest legal challenge.

SEBI has announced its intention to take "appropriate legal steps" to challenge the court’s directive, setting the stage for a legal battle over the regulator’s handling of stock market oversight.