Options against order of adjudicating officer under sebi act

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Querist : Anonymous

Querist : Anonymous (Querist)

07 September 2011 I just want to know what actions can we take against the Order of Adjudicating Officer under SEBI ACT, 1992 ( in case of order passed against stock broker)

Can we go in consent against the Order of Adjudicating Officer (after levied penalty)

CA Paras Shah
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Preety Parik

Preety Parik (Expert)
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07 September 2011 1. Against the adjudication order, either appeal before Securities Appellate Tribunal or can opt for Consent.

2. Yes, Consent can be opted even after the adjudication order.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2011 In case member having institutional business, member has to give clarifications to all institutions regarding penalty levied by adjudicating officer which definitely have an adverse effect on business of the member. So, in such case what remedy a member has against the order of A.O.

Can we have an option to dispose of the case by opting for consent or something??????

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 August 2024 Under the SEBI Act, 1992, if a stock broker or any other entity receives an adverse order from the Adjudicating Officer, there are several options available for challenging or dealing with the order. Here’s a detailed overview of the remedies and actions that can be taken:

### 1. **Appeal to the Securities Appellate Tribunal (SAT)**

- **Appeal Process:** The primary recourse against an order of the Adjudicating Officer is to file an appeal before the Securities Appellate Tribunal (SAT). The appeal must be filed within 45 days from the date of the receipt of the order. The SAT has the authority to confirm, modify, or set aside the order of the Adjudicating Officer.
- **Procedure:** To file an appeal, you need to prepare a detailed appeal petition including grounds for appeal and submit it along with the required fee to the SAT.

### 2. **Consent Order**

- **Consent Procedure:** SEBI provides a mechanism for "consent orders" where a party can settle the case without admitting or denying the charges. This involves negotiating with SEBI for a settlement on terms that may include penalties or other conditions.
- **Applicability:** Consent can be sought either before the adjudication order is passed or, in certain cases, after the order. However, consent agreements are generally negotiated before the final adjudication order.
- **Process:** To initiate a consent order, you must apply to SEBI’s Consent Mechanism by submitting a consent application. If the application is accepted, negotiations will be held to arrive at a settlement.

### 3. **Review Petition**

- **Review Request:** You may request a review of the order by filing a review petition if you believe there has been a mistake or oversight. This is a request to the same Adjudicating Officer or the authority to reconsider their order.
- **Process:** The review petition needs to be filed within a reasonable time from the date of the order, and it should clearly state the grounds for requesting a review.

### 4. **Judicial Review**

- **Writ Petition:** If the order is seen as being in violation of the principles of natural justice or if there are other legal grounds, you may file a writ petition before the High Court challenging the order. This is a legal remedy where the High Court reviews the decision of the Adjudicating Officer.
- **Procedure:** A writ petition must be filed within a specific period, usually within 90 days of the order, and should be based on grounds of jurisdictional errors or procedural irregularities.

### 5. **Clarifications and Communication**

- **Communicate with SEBI:** In some cases, you may seek clarifications or request a review meeting with SEBI to discuss the implications of the order and potential remedies. This can help in understanding the order’s impact and exploring possible adjustments.

### **Summary of Actions:**

1. **Appeal to SAT** - Challenge the order by filing an appeal within 45 days.
2. **Seek Consent Order** - Opt for a settlement if applicable and permissible.
3. **File a Review Petition** - Request reconsideration of the order on specific grounds.
4. **Judicial Review** - File a writ petition in the High Court if there are legal grounds.
5. **Communicate with SEBI** - Seek clarifications or further discussions if needed.

### **Important Considerations:**

- **Impact on Institutional Business:** When a penalty or order affects institutional business, communication with clients and institutions about the regulatory action is necessary. Address concerns transparently and demonstrate compliance with regulatory standards.
- **Legal Counsel:** Engage with legal professionals specializing in SEBI regulations to navigate these processes effectively and to ensure all actions are in compliance with applicable laws.

These steps provide a structured approach to dealing with adverse orders from the Adjudicating Officer under the SEBI Act.