SEBI scans Facebook profiles; finds evidence in 'insider trading' case
It was found that the entities involved in the insider trading case were 'friends' on the social networking site
Markets regulator Securities and Exchange Board of India (SEBI) had looked at Facebook accounts of suspected persons under an insider trading case, reports state.
According to reports, the watchdog has been scanning Facebook profiles of suspected persons to determine their probable link to a case related to violation of insider trading norms.
SEBI's investigation revealed that the Facebook profiles in the insider case related to Deep Industries. It was found that the entities involved in the case were 'friends' on the social networking site and had 'liked' each other's photos posted on the platform.
"The profiles of these persons were having restricted access and the photos posted by them can be 'liked' only by select persons whom they have added as their 'friends' on Facebook," the regulator said in an order dated April 16.
The watchdog has ordered impounding of unlawful gains worth over Rs 2.4 crore from three entities involved in the case.
The investigation found three entities as allegedly connected in the case. Rupeshbhai Kantilal Savla, Sujay Ajitkumar Hamlai and V Techweb India Pvt Ltd were found to have had traded in Deep Industries Ltd (DIL) shares while possessing price-sensitive information.
According to SEBI, the accused had details pertaining to the company bagging three contracts from ONGC and using it the entities made illegal gains, as per SEBI.
DIL's Managing Director Rupeshbhai Kantilal Savla and his wife Sheetal Rupesh Savla -- also one of the promoters -- were acquainted with the two directors of V Techweb -- Ajay Ajitkumar Hamlai and Sujay Ajitkumar Hamlai -- through Facebook.
The Savla couple was also found to be friends with Radhika Hamlai, wife of Ajay Hamlai through the platform.
Ajay and Sujay were found to be associated with DIL by virtue of frequent communication with Rupeshbhai Kantilal Savla.SEBI expects them to have access to the unpublished price sensitive information related to DIL in July-October 2015 period.
"... They had a social relationship which also can confer access to UPSI as envisaged in SEBI's PIT (Prohibition of Insider Trading) regulations," the order said.
According to SEBI guidelines, a person or an entity is considered an insider on a host of parameters, including by way of their association in any capacity with the company concerned and if they have an access to unpublished price sensitive information.
Those involved in frequent communication with officers, including through "likes on social media", of the company concerned can also be considered as insiders.
(With inputs from PTI)