Faculty Seminar | Reconsidering SEBI Disgorgement

This faculty seminar is being held on March 30, 2022 at 4.30 PM.

Speakers:

• Renuka Sane, Associate Professor at the National Institute of Public Finance and Policy
• S. Vivek, Research Fellow, Regulatory Governance Project, NLSIU

Abstract:

We study SEBI disgorgement from three perspectives. First, we study the theory of disgorgement, and find that it is a ‘gain based remedy’ that is different from compensation and restitution and that it is used for the purpose of deterrence. Second, we study the evolution of disgorgement at SEBI and find that justifications for the use of disgorgement are similar to the traditional restitutionary remedies in private law, and are not consistent with the theoretical understanding of disgorgement. Third, we study SEBI orders and evaluate if they adhere to the principles of restitutionary remedies that are the basis of SEBI’s justification for the use of disgorgement. We find that this is not the case. We argue that the justification for disgorgement and the manner in which it is applied by SEBI requires reconsideration.