Balancing power and accountability: an evaluation of SEBI’s adjudication of insider trading

The article evaluates the Securities and Exchange Board of India’s (“SEBI”) orders on insider trading matters between September 2009 and July 2023, and the performance of such orders on appeal before the Securities Appellate Tribunal (“SAT”). It develops an evaluation framework based on elements of the rule of law applicable to regulatory adjudication. It finds that SEBI orders often fall short of standards laid down in law. It also finds an overall appeal rate of such orders between 30–41%. This does not include more recent appeals that may not have been decided. Appeals before the SAT are more likely when the monetary sanctions are higher than the minimum threshold of ₹1 million. Once appealed, almost 52% of the orders are modified. We suggest that one way to improve SEBI orders to ensure that they withstand appellate scrutiny is investing in capacity building and order writing.