sebi
Published on 14 July 2025
Insider Trading Penalties for Former Infosys Employees: SEBI Actions Explained
SEBI Cracks Down on Insider Trading Linked to Infosys-Vanguard Deal
Strong Penalties Imposed on Former Infosys Employees Over UPSI Violations
In a significant enforcement action underscoring its zero-tolerance stance on market abuse, the Securities and Exchange Board of India (SEBI) has penalised two former Infosys employees in connection with insider trading violations stemming from a major corporate deal between Infosys and Vanguard. The regulator’s final order details how unpublished price sensitive information (UPSI) was misused and unlawfully shared ahead of the official announcement of the partnership in July 2020.
The Heart of the Case: Infosys-Vanguard Partnership
The matter pertains to Infosys’ strategic engagement with Vanguard to digitally transform its defined contribution recordkeeping business—a deal that was publicly disclosed on July 14, 2020. Prior to the announcement, the information was deemed UPSI under SEBI regulations and was accessible to select individuals within Infosys.
SEBI’s Investigation Uncovered:
- A chain of communication involving an internal employee who had access to UPSI.
- A subsequent trade based on that information, yielding significant unlawful gains.
Penalties and Key Individuals
1. Keyur Maniar
A former associate connected to Infosys, Maniar was found to have executed trades in Infosys shares after receiving UPSI from a company insider.
- Penalty: ₹30 lakh
- Market Ban: Barred from the securities market for one year
- Disgorgement: Ordered to return over ₹2.6 crore in illegal gains, along with 12% annual interest from July 12, 2020 until full deposit into an escrow account
- Escrow Status: The gains were earlier impounded under SEBI’s interim order dated September 27, 2024, and held in escrow
2. Ramit Chaudhri
Then an Infosys employee, Chaudhri was found guilty of communicating UPSI to Maniar. Though he did not trade himself, SEBI held that the act of passing on sensitive, non-public information constituted a serious breach.
- Penalty: ₹30 lakh
- Market Ban: Barred from the securities market for one year
- Not Held Liable for Trading, but penalised solely for UPSI communication, which under SEBI’s 2015 Insider Trading Regulations, is itself a distinct offence
3. Salil Parekh, Infosys CEO
In a separate but related settlement in June 2020, Parekh paid ₹25 lakh to settle charges pertaining to alleged lapses in internal controls that were supposed to prevent insider trading around the time of the Vanguard deal. SEBI accepted the settlement without admission or denial of guilt.
SEBI’s Observations and Regulatory Reasoning
The regulator, in its final order, took a strict view of the facts.
- Connected Persons: Maniar was classified as a “connected person,” which triggered a presumption of access to UPSI.
- UPSI Flow: The information clearly originated from Chaudhri, who was privy to the deal by virtue of his role.
- Regulatory Breach: Even in the absence of trading activity, the mere act of sharing UPSI with another party was held to be a violation of SEBI’s regulations.
Whole-time Member Ananth Narayan, who authored the order, remarked on the importance of deterrent penalties in upholding the integrity of India’s capital markets. “The communication of UPSI, even if not accompanied by trading, poses a significant threat to fair and transparent price discovery,” the order noted.
Timeline Snapshot
| Event | Date |
|---|---|
| Infosys-Vanguard deal announced | July 14, 2020 |
| UPSI-based trades by Maniar | Before July 14, 2020 |
| SEBI interim order (impounding gains) | September 27, 2024 |
| SEBI final penalty order | February 2025 |
Summary of Regulatory Actions
| Name | Association | Offence | Penalty | Market Ban | Additional Action |
|---|---|---|---|---|---|
| Keyur Maniar | Linked to Infosys | Insider Trading | ₹30 lakh | 1 year | Disgorgement + 12% interest |
| Ramit Chaudhri | Ex-Infosys employee | Communicating UPSI | ₹30 lakh | 1 year | — |
| Salil Parekh | Infosys CEO | Inadequate Internal Controls | ₹25 lakh* | — | Settled via consent order |
Implications for Market Participants
This case highlights how SEBI’s enforcement approach has matured, especially with its focus on:
- Preventing information asymmetry in sensitive corporate transactions
- Proactively tracking suspicious trading patterns using its surveillance systems
- Holding both traders and communicators accountable, regardless of whether direct trading occurred
It also reiterates the importance of strong internal controls within listed companies, especially during periods involving price-sensitive corporate developments.
Conclusion
SEBI’s crackdown in the Infosys-Vanguard insider trading matter sends a clear message: breaches of confidentiality and improper use of privileged information will not be tolerated. The penalties imposed—both financial and reputational—reinforce the principle that capital markets function best when trust and transparency are non-negotiable.