Sebi's Turbocharged Probes: More Cases, Sharper Cases

The Securities and Exchange Board of India (Sebi) has initiated an unprecedented number of investigations, launching 400 new probes in the financial year 2024-25. This marks a significant escalation from the 342 fresh investigations in FY24 and 144 in FY23. Sebi is leveraging advanced technology, particularly artificial intelligence, and has significantly expanded its investigations department to manage this increased caseload and enhance the thoroughness of its inquiries.

Recent Sebi orders, such as those against Avadhut Sathe and Jane Street, exemplify this shift. These detailed, often lengthy documents, meticulously analyze evidence like video recordings, chat logs, and trading data. This intensive approach contrasts with earlier investigations, like the 2023 Axis Mutual Fund case, and aims to create "watertight" cases that are more resilient to challenges at the Securities Appellate Tribunal (SAT).

This enhanced investigative rigor is partly a response to SAT's past criticisms. Sebi's investigations wing has grown substantially, with a more structured approach and clearer timelines now in place, often completing investigations within one to two years. Despite the rising number of completed cases, pending investigations under Section 11 of the Sebi Act increased to 169 in FY25, indicating the ongoing challenge of complex market frauds.