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CS Executive · Capital Market and Securities Laws · Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market

Ravi made profits of Rs 12 crore through a fraudulent scheme in the shares of a listed company. Under Section 15HA of the SEBI Act, 1992, what is the maximum penalty that can be imposed on him?

The maximum penalty is Rs 36 crore. Section 15HA allows a penalty up to twenty-five crore rupees or three times the profits made, whichever is higher. Three times Rs 12 crore is Rs 36 crore, which is greater than Rs 25 crore.

  1. ARs 25 crore, because it is higher than three times the profits
  2. BRs 12 crore, being the profit made
  3. CRs 36 crore, being three times the profitsCorrect
  4. DRs 37 crore, being Rs 25 crore plus the profits

Explanation

The ceiling is the higher of Rs 25 crore or three times the profits. Three times Rs 12 crore is Rs 36 crore, which exceeds Rs 25 crore. Option one picks the lower figure, and the sum in the last option is not provided for.

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