Infosys, a major player in information technology, and its CEO, Salil Parekh, have settled an insider trading case with the Securities and Exchange Board of India (Sebi) by agreeing to pay Rs 25 lakh.
The issue dates back to July 2020, when Infosys announced a partnership with US-based Vanguard, a global asset manager. Infosys was to provide a cloud-based record-keeping platform to Vanguard. According to Sebi, this partnership should have been considered unpublished price sensitive information (UPSI) under its regulations. Infosys, however, failed to classify it as such.
UPSI is crucial under Sebi’s Prohibition of Insider Trading (PIT) Regulations, which aim to prevent manipulation or misuse of information that could significantly impact stock prices.
In August 2023, Sebi issued a show-cause notice to Infosys. In response, the company filed a consent settlement plea. This type of plea allows the accused to settle without admitting or denying guilt by agreeing to pay a penalty or facing a market ban.
Sebi’s High Powered Advisory Committee (HPAC) approved the settlement application. Infosys mentioned in its application that its process for identifying UPSI has been reviewed by the audit committee and the board. The process has now been formalized into a written and approved policy.
