NLS Faculty Seminar | Balancing Power and Accountability: An Evaluation of SEBI’s Adjudication of Insider Trading

Welcome back! We are beginning this trimester’s faculty seminar with a guest presentation by Dr. Renuka Sane and Bhavin Patel from TrustBridge, an organization that works on rule of law and the economy. They will be presenting their paper titled ‘Balancing Power and Accountability: An Evaluation of SEBI’s Adjudication of Insider Trading’ on March 5, 2025, at the Ground Floor Conference Hall at NLSIU’s Training Centre.

Abstract

The paper evaluates the Securities Exchange Board of India’s (SEBI) orders on insider trading matters over a 15-year period, and the performance of the orders in appeal before the Securities Appellate Tribunal (SAT). The paper develops an evaluation framework based on elements of the rule of law applicable to regulatory adjudication and finds that in a large number of orders SEBI does not follow the standards laid down in its own laws. The paper also evaluates how these orders have fared at the SAT, and finds an overall appeal rate between 30-38%.This is likely to be higher as orders appealed in more recent years will not have been completed, and hence the data on them is unavailable. Once appealed almost 60% of orders are modified – that is they are either fully or partially allowed, or the sanction amount is modified. The frequent setbacks suggest that sebi may need to rethink its approach to enforcement. Finally, the paper makes some suggestions grounded in legal theory on how SEBI could improve its order-writing process.

About the Speakers

Dr. Renuka Sane is Managing Director at TrustBridge. Before joining TrustBridge, she was an Associate Professor at the National Institute of Public Finance and Policy (NIPFP). Her research interests are in household finance, especially on household choice in financial instruments such as credit, pensions, insurance and equity markets, as well as consumer protection in finance. She also has interests in research and policy on the criminal justice system in India.

Dr. Sane was a peer reviewer for the Financial Sector Legislative Reforms Commission (FSLRC) on consumer protection. She was also on the research team for the Bankruptcy Legislative Reforms Committee (BLRC) on the insolvency of individuals (2015) and the research team for the DEA Committee on Mis-selling (2015). She is also a member of the Pension Advisory Committee of the Pension Fund Regulatory Development Authority (PFRDA). Dr. Sane has a PhD in Economics from the University of New South Wales and holds an M.A. in Economics from Mumbai University.

Bhavin Patel is Programme Director at TrustBridge Rule of Law Foundation. At TrustBridge, Bhavin manages the Regulatory Governance project, which involves a technology-assisted analysis of regulatory orders at scale.

Bhavin Patel has two decades’ experience across the legal, technology, and education industries. He successfully helped launch and scale two start-ups, and is now working on his third venture. He has worked across in-house legal departments (ITC Ltd., IDfy), and law firms (DSK Legal, Aureus Law Partners), primarily in the area of commercial legal advisory services. Bhavin has been part of the founding team of start-ups that provide services to the legal industry (LST, Rainmaker, Bayside Tech).

Bhavin specialises in privacy laws, and has a deep interest in the intersection between law and technology, and the fundamental logical principles and methods underlying both. Along with his law firm experience, he routinely advises clients on data protection issues, KYC, AML, CFT, and general corporate matters and commercial contracts. His area of expertise includes devising privacy strategies for businesses involved in the collection, processing, and storage of personal data.

Reflections from the seminar

Bhavin Patel, Programme Director, TrustBridge Rule of Law Foundation said:

“I’d like to thank the NLSIU faculty community for the opportunity to present our paper titled ‘Balancing Power and Accountability: An Evaluation of SEBIs Adjudication of Insider Trading’ at the faculty seminar. The paper evaluates the Securities Exchange Board of India’s (SEBI) orders on insider trading matters over a 15-year period and the performance of the orders in appeal before the Securities Appellate Tribunal (SAT). We have used a combination of methods, including LLMs to create our dataset, and we hope to release our paper and dataset shortly.

The comments and feedback we received at the seminar are of immense help to us in refining our arguments and finalising the paper. We had the chance to speak with faculty across a range of subjects, from administrative law to capital markets law, and this well-rounded, wide-ranging set of observations has been of critical value to us.

We look forward to engaging more with the NLSIU community, and to bringing our future work to this forum as well.”

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