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CS Executive · Capital Market and Securities Laws · Prohibition of Insider Trading

Under Section 15G of the SEBI Act, 1992, what is the maximum penalty an insider may face for insider trading?

The penalty may extend to twenty-five crore rupees or three times the profits made out of insider trading, whichever is higher, and it cannot be less than ten lakh rupees. So the ceiling is the higher of the two amounts, not the lower.

  1. ATwenty-five crore rupees or three times the profits made out of insider trading, whichever is higherCorrect
  2. BTwenty-five crore rupees or three times the profits, whichever is lower
  3. CTen lakh rupees or three times the profits, whichever is higher
  4. DThree times the profits made, with no rupee ceiling or floor

Explanation

The text says the penalty shall not be less than ten lakh rupees but may extend to twenty-five crore rupees or three times the profits made out of insider trading, whichever is higher. The 'lower' option reverses this, and ten lakh is the minimum, not the maximum.

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