SEBI begins searches in the WhatsApp leak case

Ajay Tyagi, chairman of SEBI, speaks at a news conference after its board meeting at SEBI headquarters in Mumbai

Markets regulator SEBI has begun searches on more than 40 people in relation to the WhatsApp leak. The identified people include officials from companies, brokers and individuals, sources told Moneycontrol.

Moneycontrol reported the action first at 02:18 pm today.

SEBI has done searches in Mumbai, Delhi and Bengaluru, however, most of them have been conducted in Mumbai.

“SEBI has conducted searches in Mumbai, Delhi and Bengaluru and seized laptop, mobile and hard disks of computers of the concerned entities,” sources told Moneycontrol.

SEBI has deployed 70 officials in this massive search operation, which started at 4.30 am on Friday.

One of the searches was carried out at a bank’s brokerage arm. The earnings of the firm were leaked before declaring it in public.

“SEBI has already identified the individuals by WhatsApp numbers mentioned in the group where results were out before they were in the public domain,” another source said.

Brokers say that this action will send a strong message in the market and help curb insider trading in some companies. They also admitted that the leaks are not just restricted to private companies, even PSUs’ results are leaked.

“This is the first action which shows regulator take steps pro-actively,” said a broker.

“This operation will alert everyone that any message or any medium can be tracked by the regulator and that even Enforcement Authorities are rising in Digital India to maintain hygiene in the capital markets,” said Sumit Agrawal, founder Suvan Law Advisors.

A market expert told Moneycontrol on the condition of anonymity: “Whether these seized items could translate any major case against these entities is not certain but they have sent strong signal to market participants that regulator is watching you.”

Last month, the regulator started examining trade details of over two dozen stocks as part of a probe into the alleged leak of key financial details of these companies through WhatsApp.

A large number of SEBI officials are involved in the searches and they are looking into the accounts for the trades which came to light in the WhatsApp leak.

The markets regulator has been "seriously" looking into the complaints about some individuals allegedly circulating key financial details and other market moving information about listed companies on social media groups before they are made officially public.