Share on LinkedInShare on LinkedIn

ARTICLE · 14 MARCH 2023

Upholding Disgorgement Principles

Capital markets operate under a constant threat of malpractices which benefit a select few, at the cost of public investors and market integrity.

IndiaCorporate/Commercial Law

Capital markets operate under a constant threat of malpractices which benefit a select few, at the cost of public investors and market integrity. Wrongful conduct, such as insider trading, front-running, fraudulent schemes, siphoning of money, etc., often results in an unlawful gain or avoidance of loss for the wrongdoer, which, would not have ordinarily been possible, but for the wrongdoing. Over the years, disgorgement has evolved as a remedial measure to deprive a wrongdoer of gains arising out of wrongful conduct, termed 'unjust enrichment' in legal parlance, and restore status quo ante, in legal jargon, in the securities market.

Disgorgement is a gain-based, equitable remedy which seeks to reverse the unjust enrichment of the wrongdoer by stripping them off the fruits of their illegal conduct and placing them in the same position as if no wrongdoing had happened. Under the Securities and Exchange Board of India Act, 1992 (SEBI Act), SEBI is empowered to direct

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

The contents of this article should not be construed as legal opinion. Recipients should take independent legal advice before acting on any views expressed herein. The comments in the article are as of the laws prevalent on the date the article was originally published. The views stated in the article are not binding on any authority or court, and so, no assurance is given that a position contrary to that expressed herein will not be asserted by any regulatory authority/courts. For any further queries or follow up, please contact Finsec Law Advisors.

See more popular content from