The Securities Appellate Tribunal (SAT) has overruled the Securities and Exchange Board of India’s (SEBI) insider trading charges against several individuals for circulating Unpublished Price Sensitive Information (UPSI) of companies such as Bajaj Auto, Asian Paints, Bata India, Mindtree, Wipro and Ambuja Cements.

SEBI’s rules that prohibit insider trading activities restrict sharing UPSI before official announcements too.

Shruti Vishal Vora was penalized by the SEBI for releasing UPSI-related to financial results of the given companies via WhatsApp messages.

Similarly, fines were imposed on Neeraj Kumar Agarwal for circulating UPSI-related to financial earnings of Ambuja Cement, Asian Paints and Bajaj Auto. The duo of Parthiv Dalal and Aditya Omprakash Gagar were similarly penalized for doing so in the case of earnings of Bata India and Wipro.

However, the concerned individuals moved to SAT claiming that they merely forwarded the messages and that the texts didn’t originate from them. Moreover, SEBI was unable to trace the origins of the message due to robust end-to-end encryption of WhatsApp messages.

Whilst setting aside the regulator’s order, SAT pointed out the SEBI’s inability to acknowledge that the WhatsApp messages under scanner could have stemmed from brokerage houses or from the estimates on Bloomberg’s platform, Times of India reports.

It mentioned that any information can be termed to be UPSI only if the person receiving it knows that it to be an UPSI as there are instances of other such forwarded messages that didn’t match the final published financial result.

SEBI failed “to prove any preponderance of probabilities that the impugned messages were unpublished price sensitive information, that the appellants knew that it was unpublished price sensitive information and with the said knowledge they or any of them had passed the said information to other parties,” according to the SAT.