Every SEBI enforcement action — from investigation to adjudication to penalty — must satisfy statutory pre-conditions, procedural safeguards and the standard of proof that the Supreme Court has repeatedly calibrated. AMLEGALS builds the defence around these requirements.
SEBI’s enforcement power under the SEBI Act 1992 is broad but not unbounded. The Supreme Court in SEBI v Kishore R. Ajmera (2016) laid down that a charge of fraud or manipulation in the securities market must be proved to a standard higher than a mere preponderance of probability, even though SEBI proceedings are civil. Every show-cause notice, every investigation report and every penalty order must therefore be tested against this standard and against the natural-justice safeguards that the Act and the Supreme Court mandate.
AMLEGALS approaches SEBI defence on three fronts: the factual matrix and whether the evidence actually supports the charge; the statutory pre-conditions for the particular power exercised; and the proportionality of the proposed penalty or direction. The strategy is set before the reply is drafted — whether to contest, to negotiate settlement or to reserve the challenge for the Securities Appellate Tribunal — and each option is weighed against the client’s commercial, regulatory and reputational position.
Drafting comprehensive replies to SEBI show-cause notices with documentary evidence, legal precedent and factual matrices addressing each allegation.
Representing noticees before SEBI Adjudicating Officers in penalty proceedings under Sections 15A–15HB, including personal hearings and written submissions.
Advising on and negotiating settlement applications under the Settlement Proceedings Regulations 2018, calibrating terms against litigation risk.
Advising clients during SEBI investigation and inspection under Sections 11C and 11(2)(ia), including search and seizure and information requests.
Filing and arguing appeals before the Securities Appellate Tribunal under Section 15T and further appeals to the Supreme Court under Section 15Z.
Contesting ex parte ad-interim orders under Section 11B and directions restraining access to the securities market.
SEBI initiates enforcement when its surveillance, inspection or investigation division identifies a potential violation of the SEBI Act 1992, the Securities Contracts (Regulation) Act 1956 or subordinate regulations. The process typically begins with an investigation order under Section 11C, followed by a show-cause notice. Adjudication for monetary penalties proceeds under Sections 15A through 15HB before an Adjudicating Officer appointed under Section 15-I.
SEBI can impose monetary penalties under Sections 15A–15HB of the SEBI Act 1992 — for insider trading (Section 15G, up to ₹25 crore or three times the profit, whichever is higher), for fraudulent and unfair trade practices (Section 15HA), for failure in disclosure obligations and for non-compliance with its directions. It can also issue debarment orders, disgorgement directions and directions under Section 11B including restraining persons from accessing the securities market.
Yes. The SEBI (Settlement Proceedings) Regulations 2018 (as amended) permit a noticee to apply for settlement before a Settlement Order is passed, on payment of a settlement amount and such undertakings as SEBI’s Internal Committee or High Powered Advisory Committee may determine. SEBI can also pass a consent order without admission of guilt. Settlement is a strategic decision that must weigh the stage of proceedings, the quantum proposed and the reputational impact of continued proceedings.
The Securities Appellate Tribunal, constituted under Section 15K of the SEBI Act, hears appeals against orders of the SEBI Board, SEBI Adjudicating Officer and orders under the Depositories Act 1996. An appeal must be filed under Section 15T within 45 days of the order. The SAT can confirm, modify or set aside the order. A further appeal lies to the Supreme Court under Section 15Z on a question of law.
Yes. SEBI’s adjudication under Chapter VIA is civil in nature and can proceed independently of a criminal prosecution under Section 24 of the SEBI Act. However, the Supreme Court in SEBI v Kishore R. Ajmera (2016) and other decisions has drawn distinctions about the standard of proof applicable. The defence must account for both tracks simultaneously and ensure that submissions in one do not prejudice the other.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing.
Share the nature of the SEBI proceeding — show-cause notice, investigation, adjudication or appeal — for a confidential preliminary assessment.