The Securities Appellate Tribunal (SAT) has granted an interim stay on markets regulator Sebi order that had slapped a penalty of Rs 25 crore on Yes Bank in a case of mis-selling AT-1 bonds. Apart from penalising Yes Bank, Sebi in its order in April, imposed a fine of Rs 1 crore on Vivek Kanwar, who was the head of the private wealth management team, and Rs 50 lakh each on Ashish Nasa and Jasjit Singh Banga. The two individuals were part of the private wealth management team at the time of the violation.
Sebi alleged misrepresentation by the bank and certain officials for not informing investors of the risk involved while selling the AT -1 (Additional Tier-1) bonds in the secondary market.
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In a relief for Yes Bank Ltd in the AT-1 (additional tier-1) bonds case, the Securities Appellate Tribunal (SAT) has imposed an interim stay on an order passed by Securities and Exchange Board of India (SEBI), which had imposed a penalty of Rs25 crore on Yes Bank, and three of its executives Rs1 crore on Vivek Kanwar and Rs50 lakh each on Ashish Nasa and Jasjit Singh Banga.
This is a setback for the hapless AT-1 bond holders, which include retail investors, institutional investors like Indiabulls and 63 moons technologies, who had taken the legal route and complained to SEBI. The investors alleged that they were sold these bonds by the bank on false assurances and hence they need to be compensated by the bank. The case is ongoing in Bombay High Court but both YES Bank and the Reserve Bank of India (RBI) have so far maintained that the AT-1 bond write-off is as per the Basel III rules.
YES Bank has obtained an interim stay on the Securities and Exchange Board of India s (Sebi s) order dated April 12 which imposed a penalty of Rs 25 crore for alleged mis-selling of additional tier-1 (AT-1) bonds. “We stayed the effect and operation of the impugned order against the appellants provided the appellant bank, namely, YES Bank gives an undertaking on behalf of the bank, as well as on behalf of the other appellants who were members of the private wealth management team to the effect that in the event of failure of the appeal, the bank would pay the penalty amount within two weeks from the date of the order,” the Securities Appellate Tribunal (SAT) said in an order.
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On Monday, the Securities Appellate Tribunal (SAT) caused quite a buzz by allowing the National Stock Exchange’s (NSE) demand to release Rs6,085 crore of revenue earned from its algo trading and co-location (Colo) services.
Asking the Exchange to block this sum in an escrow account was one of the punitive actions initiated by the Securities and Exchange Board of India (SEBI) following the algo scam investigation that started in 2015.
The order is an embarrassing indictment of the market regulator, which has been conducting a meandering investigation and issued multiple orders over the past six years that are nothing more than a slap on the wrist of the Exchange. Meanwhile, SEBI’s initial investigation and orders have already weakened the case against the Exchange by failing to fix individual responsibility for repeated violations of rules, failing to quantify illegal gains made by brokers and, worse, failing to comprehend the enormity of profiteering that was pos
In an order uploaded on its website on Friday, SAT has directed the closure of the escrow account and permitted the NSE to utilise the amount for the business purposes.