Sharing of Unpublished Price Sensitive Information on WhatsApp and “Innocent Tippee” Liability

the authors submit that the SAT erred on two counts in overruling the SEBI orders. First, as was suggested in the N.K. Sodhi Committee Report, the burden of proof to establish that the accused persons did not have knowledge that the information in question was UPSI should logically have been placed on the accused persons. It is rather difficult to envisage how the SEBI could discharge such burden of proof. Second, in any event, this may not have not have been an appropriate matter for invocation of a defense based on a lack of knowledge when the submissions on record themselves indicate that there was no application of mind in forwarding messages, let alone any diligence that would be expected from persons involved in the financial markets.