Sucheta Dalal :Cease & Desist: Just Eight Months Late
Sucheta Dalal

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Cease & Desist: Just Eight Months Late  

December 3, 2009

On 9 March 2009, Moneylife wrote to SEBI chairman CB Bhave: “You may like to check this. This man is soliciting inside information openly. Would appreciate feedback on any action SEBI may initiate on this.” We provided a link to a website by one Dr Krishna Nalamothu, who openly offered to pay for “inside information on sales, mergers and corporate action.” The link was

The feedback we sought came in the form of SEBI's cease-and-desist order issued on 18 November 2009, more than eight months after our alert. SEBI claims that it ‘noticed’ Dr Nalamothu Venkata Krishna’s website on 7 March 2009 soliciting unpublished price-sensitive insider information in return for a share in the profits between Rs10,000 and Rs1,00,000.

Ironically, the order ponderously says that it is SEBI’s job as a regulator to take ‘urgent steps’ to ensure that investors are not cheated by lures offered by Dr Krishna. It asks him to stop soliciting information or trading on the basis of inside information. Even though the order had been issued eight months later, SEBI has made no attempt to contact the offender and merely offers him the opportunity of a personal hearing—should he want one. After the order, Dr Krishna’s mobile is ‘out of coverage area’ and the particular link offering insider information is now disabled.

But his many Web profiles are accessible, as are his email and mobile numbers and photographs of his family. His pitch was: I am now proposing a wonderful money-making opportunity for Stock Market experts and those who have access to inside news. We all know that “Big people” in Mumbai and Kolkata have more access to inside news than ordinary retail investors. If you have access to inside news, you can make more money than your salary. Just mail or call me with your idea, if it helps my subscribers to make money, you will get very good income.

SEBI’s action suggests that it has rummaged through its files to look for links to Andhra Pradesh and insider trading after the US Securities Exchange Commission's (SEC) arrest of billionaire Indian trader, Raj Rajaratnam of Galleon Group.

-- Sucheta Dalal