SEBI Failure TO PERFORM HIS CONSTITUTIONAL DUTY….
SEBI is acting on face value of investor and deny action on complaint by email and SCORES app by giving general reply. In the cognizable offence they avoid enquiry and investigation. If a complainant approach the high court then he faces delay in hearing dates depending upon the pending litigation. Sometime the High court judge do not have time and listen complete issue. Its better to start from lower court. The lower courts have power to give directions to SEBI to register FIR like police if there is cognizable offence under Section 15 of SEBI act 1988 with protection from Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
Comments against SEBI For Failure to Protect The Interest Of Investors
Under Section 11(2)(c) of the SEBI Act enacted with effect from
30.01.1992, it is the duty of SEBI
to protect the interests of investors in securities and to promote the
development of, and to regulate the securities market as well as the working
of Collective Investment Schemes by taking such measures as it deems fit.
Sub-Section (1B) inserted to Section 12 of the SEBI Act by the Securities
Laws (Amendment) Act, 1995 with effect from 25.01.1995 provides that no
person shall sponsor or cause to be sponsored or carry on or cause to be
carried on a Collective Investment Scheme unless that person holds a
certificate of registration from SEBI in accordance with the regulations
framed by SEBI. From the aforesaid provisions it is clear that SEBI is the
regulatory authority for CIS.
ADVERSE REMARKS AGAINST SEBI FOR DERELECTION OF DUTY
Securities Appellate Tribunal Anil N. Alawani vs Sebi on 4 December, 2023 BEFORE THE SECURITIES APPELLATE TRIBUNAL 9 MUMBAI Order Reserved On: 30.11.2023 Date of Decision: 04.12.2023 Misc. Application No. 1436 of 2023 IN Appeal No. 499 of 2020
11. Considering the aforesaid, we are of the opinion that this lackadaisical approach by SEBI is contrary to the spirit of the SEBI Act which in our opinion is to protect the interest of the investors. In the instant case, we find that the interest of the investors, namely, the appellants were least considered and apathy was writ large. 12. We also find that when the Misc. Applications were filed before this Tribunal on November 01, 2023, all hell broke loose and the demat accounts and the shares of the appellants were defreezed on November 03, 2023. This by itself speaks volumes of the functioning of SEBI in reacting to matters at the last moment. 13. Considering the aforesaid, we are of the opinion, that SEBI should have been more diligent in ensuring compliance of the orders of this Tribunal and by taking a lackadaisical approach the interest of the investors suffered. For more than a year the appellants shares remained frozen inspite of their appeals have been allowed. Consequently, we dispose of the Misc. Applications directing the SEBI to pay cost of Rs. 5 lakhs to be deposited before the Registrar of this Tribunal within two weeks from today. In the event, SEBI finds that the fault lay with NSDL it will be open to them to take appropriate remedial measures against NSDL. The aforesaid direction has been passed by us in exercise of the powers conferred under Rule 21 of SAT (Procedure) Rules, 2000.
Securities Appellate Tribunal Ashok Dayabhai Shah & Ors. vs Sebi on 14 November, 2019 Author: Tarun Agarwala Bench: Tarun Agarwala BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI 10 Order Reserved on: 18.10.2019 Date of Decision : 14.11.2019 Appeal No. 428 of 2019 20.
We find the approach adopted by the respondents to be a strange one. Such computer generated disposal of a serious complaint speaks volume on the conduct of the respondents in treating the minority shareholders in this shabby manner. It seems that the respondents have lost sight of the mandate provided to them under Section 11 of the SEBI Act which mandates SEBI to safeguard the interest of the investors. Disposal of the complaint in this manner in the instant case indicates non-application of mind and non-consideration of the interest of the investors. We have no hesitation in stating that the SEBI as a regulator in the instant case has not performed its duties and has kept the complaint pending for more than six years which speaks volumes by itself. The Tribunal fails to fathom as to why the complaint could not have been decided unless SEBI officials had a vested interest in not deciding the matter.
. SAT Confirms That SEBI’s SCORES Acts Like a Post-office. What
Next for Investor Grievance Redress?:
Securities Appellate Tribunal
Mr. K. L. A. Padmanabhasa & Anr. vs Sebi on 3 August, 2023
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision : 03.08.2023
Misc. Application No. 892 of 2023
And
Appeal No. 614 of 2023
11. In the first instance, we are constrained to observe that SEBI is required
to address the investors’ grievance on the SCORES platform. The purpose of
this redressal system so launched by SEBI in 2011 was to provide a platform
for the aggrieved investors whose grievance pertaining to the securities market
remained unresolved by the concerned listed company, registered intermediary
or recognized Market Infrastructure Institutions. Merely seeking a reply from
the company and passing it on to the appellants and thereby closing the
complaint is not sufficient compliance of redressal of the investors’
grievance. SEBI is required to consider whether the complaint infringes any
provision of SEBI Act and its regulations and if it finds that the complaint is
genuine which violates the SEBI Act and its regulations then it is an onerous
duty of SEBI to direct the company, registered intermediary or recognized
Market Infrastructure Institution to sort out the complaint or initiate
proceedings for violation of the securities laws.
12. This procedure was apparently not done by SEBI and without applying
its mind has mechanically disposed of the complaint without considering as
to whether the provision of the LODR Regulations was violated or not.
34
15. The contention that no complaint could have been filed before SEBI on the
SCORE platform in as much as the SEBI’s Master Circular dated November 7,
2022 directs investors to first file a complaint before the stock exchange under
Clause 19 of the said circular is immaterial. No doubt, the master circular
permits an investor to raise the grievance before the stock exchange but that
does not mean that SEBI does not have jurisdiction to deal with the
complaint. Thus, the contention that this Tribunal should relegate the matter
to the stock exchange is not tenable at this stage especially when SEBI has
dealt with the matter. The objection so raised is, thus, untenable and is
rejected.
24. In view of the aforesaid, the impugned communication issued by SEBI
dated April 19, 2023 is set aside. The appeal is allowed.
25. We direct SEBI to pass appropriate orders directing the company to take
steps to dematerialize the shares of the appellants under Regulation 31(2) of
the LODR Regulations. Such direction should be passed within four weeks
from today.
21. Further, in terms of Section 62 of the Companies Act , every person who
inter alia is a director of the company at the time of the issue of the prospectus
and every person who is a promoter of the company, are liable to pay
compensation to every person who subscribes for any shares or debentures
on the faith of the prospectus for any loss or damage he may have sustained
by reason of any untrue statement included therein…
(Section 35 under company act 2013)
Stock market ‘fraud’: Court orders FIR against ex-Sebi chief Madhabi Puri Buch, 5 others
SEBI Failure to ACT
What Is SEBI and Why Does It Matter?
The Securities and Exchange Board of India (SEBI) is India’s securities market regulator. Established under the SEBI Act, 1992, its primary responsibilities are:
- Protecting investors
- Regulating stock exchanges and intermediaries
- Preventing market manipulation
- Ensuring transparency in financial markets
- Promoting fair trading practices
Today, India has millions of investors participating in shares, mutual funds, IPOs, ETFs, and derivatives markets. Trust in these markets depends heavily on SEBI’s effectiveness.
Related Keywords:
- Stock market regulator India
- Investor protection in India
- SEBI regulations
- Securities market regulator
What Do People Mean by “SEBI Failure”?
When investors discuss “SEBI failure,” they generally do not mean that SEBI has broken the law.
Instead, they are referring to situations where:
- Market manipulation allegedly continued for long periods.
- Regulatory intervention appeared delayed.
- Investor grievances remained unresolved.
- Investigations took years to conclude.
- Transparency around major cases appeared insufficient.
These concerns have intensified due to several high-profile controversies.
The Jane Street Investigation: Why Investors Became Concerned
What Happened?
Jane Street, a major global trading firm, became the subject of regulatory scrutiny regarding its trading activities in India’s derivatives markets.
The controversy sparked debate because many market participants believed:
- Certain trading patterns appeared unusual.
- Market movements seemed disproportionate.
- Retail traders suffered significant losses.
- Regulatory action appeared slower than expected.
Why It Matters
India’s Futures and Options (F&O) market has become one of the world’s largest derivative markets.
When large institutions participate in highly sophisticated trading strategies, retail investors often question whether regulators can monitor and detect manipulation quickly enough.
This case became a major example used by critics who argue that SEBI’s surveillance systems should detect suspicious activity faster.
Keywords:
- Jane Street India investigation
- F&O trading losses
- Derivatives market regulation
- SEBI market surveillance
The Adani-Hindenburg Controversy
Background
In January 2023, Hindenburg Research released a report alleging stock manipulation and governance issues involving the Adani Group.
The report triggered one of the biggest market controversies in India’s history.
Consequences included:
- Massive stock price volatility
- Billions of dollars in market value erosion
- Regulatory investigations
- Supreme Court involvement
- Intense public debate
SEBI’s Investigation
SEBI conducted investigations and submitted status reports to the Supreme Court. The investigations continued for an extended period before final conclusions were reached. Public debate focused on whether the regulator acted quickly enough and whether disclosures were sufficiently transparent.
The Ongoing Debate
Supporters of SEBI argue:
- The investigation involved complex international transactions.
- Evidence collection across jurisdictions takes time.
- Regulatory due process is necessary.
Critics argue:
- Investigations took too long.
- Investors deserved greater transparency.
- Faster action could have improved market confidence.
The controversy remains one of the most frequently cited examples when discussing SEBI’s effectiveness.
Common Investor Complaints About SEBI
1. Slow Investigations
Complex financial investigations often take months or years.
Investor concerns include:
- Delayed enforcement actions
- Continued losses during investigations
- Reduced confidence in market oversight
2. SEBI SCORES Complaint Resolution
SEBI operates the SCORES (SEBI Complaints Redress System) platform for investor grievances. SCORES allows investors to submit complaints, track progress, seek reviews, and provide feedback.
Common complaints include:
- Responses taking longer than expected
- Dissatisfaction with company replies
- Limited perception of follow-up action
However, SEBI states that SCORES is a facilitative grievance redress platform and includes review mechanisms for unresolved complaints.
3. Retail Investor Losses in F&O Trading
One of the biggest concerns in India’s markets is the high loss rate among retail derivative traders.
Critics argue:
- Investor education should be stronger.
- Risk disclosures should be more prominent.
- Speculative trading requires tighter safeguards.
What SEBI Has Done to Protect Investors
Despite criticism, SEBI has introduced numerous reforms.
F&O Market Reforms
SEBI has implemented measures including:
- Increased lot sizes
- Higher margin requirements
- Restrictions on certain contracts
- Enhanced risk management systems
These reforms aim to reduce excessive speculation and improve market stability.
Improved Corporate Governance
SEBI has strengthened:
- Disclosure requirements
- Corporate governance norms
- Related-party transaction rules
- Independent director requirements
Stronger Insider Trading Controls
SEBI has expanded regulations around:
- Insider trading
- Price-sensitive information disclosure
- Corporate reporting standards
Technology and Market Surveillance
SEBI continues investing in advanced surveillance systems designed to:
- Detect unusual trading patterns
- Monitor market manipulation
- Improve enforcement efficiency
SEBI SCORES Complaint Portal: How to File a Complaint
Official SCORES Portal
Visit:
According to SEBI, investors should first approach the company, broker, mutual fund, or intermediary directly before filing a SCORES complaint.
Documents You Need
Personal Details
- Name
- PAN
- Mobile number
- Email address
Complaint Details
- Broker or company name
- Client ID
- Transaction details
- Timeline of events
Supporting Evidence
- Contract notes
- Bank statements
- Emails
- Screenshots
- Correspondence records
SCORES Filing Checklist
Before Filing
✔ Contact the intermediary first
✔ Gather all supporting documents
✔ Create a clear timeline
✔ Specify the exact relief sought
After Filing
✔ Track complaint status
✔ Review responses carefully
✔ Use review mechanisms if unsatisfied
✔ Preserve all records
SEBI by the Numbers
According to the SCORES platform:
- Over 359,000 investors are registered on SCORES.
- More than 42,000 complaints were registered in the current financial year.
- More than 37,000 complaints were disposed of during the same period.
These figures demonstrate both:
- The large number of investor grievances.
- The scale at which SEBI processes complaints.
Where SEBI Has Succeeded
Even many critics acknowledge that SEBI has:
Built One of the World’s Largest Securities Markets
India’s capital markets have grown dramatically under SEBI’s regulatory framework.
Improved Transparency
Listed companies now face significantly stronger disclosure requirements.
Strengthened Mutual Fund Oversight
India’s mutual fund industry operates under a structured regulatory framework that has increased investor confidence.
Enhanced Investor Awareness
SEBI regularly conducts investor education initiatives through various channels.
How Investors Can Protect Themselves
Before Investing
- Read annual reports.
- Research company fundamentals.
- Diversify investments.
- Avoid social media tips.
- Understand risk before investing.
Before Trading F&O
- Learn leverage and margin concepts.
- Use stop-loss orders.
- Avoid emotional trading.
- Never trade with borrowed money.
- Limit position sizes.
Frequently Asked Questions
What is SEBI?
SEBI is India’s securities market regulator responsible for protecting investors and regulating capital markets.
What is a SEBI SCORES Complaint?
A complaint filed through SEBI’s online grievance redress platform called SCORES.
Can Investors File Complaints Against Brokers?
Yes. Investors can file complaints against SEBI-regulated entities through SCORES.
Has SEBI Been Criticized?
Yes. Critics often point to investigation timelines, complaint resolution issues, and regulatory response speed.
Is SEBI Failing Investors?
Opinions differ. Some believe SEBI should act faster and be more transparent. Others point to significant reforms, stronger governance standards, and successful market development.
Conclusion: Is SEBI Failing Investors?
The phrase “SEBI failure” has become increasingly common in discussions about investor protection in India. High-profile controversies such as the Jane Street investigation and the Adani-Hindenburg matter have intensified public scrutiny and raised legitimate questions about regulatory speed, transparency, and accountability.
At the same time, it is important to recognize the broader picture. SEBI oversees one of the world’s fastest-growing capital markets, regulates thousands of market participants, and manages investor protection across an increasingly complex financial ecosystem. Over the years, it has strengthened corporate governance standards, improved market surveillance, expanded investor grievance mechanisms, and introduced reforms aimed at reducing excessive speculation.
No regulator is immune from criticism. The real question is not whether SEBI is perfect, but whether it continues improving its ability to protect investors while supporting market growth.
For retail investors, the most effective protection remains a combination of informed investing, risk management, diversification, proper documentation, and active use of official grievance mechanisms such as SCORES.
Ultimately, investor protection is strongest when regulators, companies, intermediaries, and investors themselves all play their part.
