The Securities and Exchange Board of India (SEBI) has banned Srinivas Maddineni, an individual who was employed with Divi's Laboratories Ltd since 2017, from the stock market for two years for indulging in insider trading activities with the shares of the pharma company.
The market regulator has imposed a one-year ban from the securities market and a fine of Rs 11 lakh on Maddineni.
He worked as Assistant General Manager in the Environment, Health and Safety Department at Divi's Lab. SEBI has also asked him to disgorge wrongful gains of Rs 1.83 lakh along with 12% annual interest that will be applicable from 10 July 2017 till the date of actual payment of the disgorgement amount.
The regulator said that it conducted an investigation into suspected insider trading activities of certain entities in the shares of Divi's Laboratories for the period of 7 July 2017 to 10 July 2017 to ascertain whether certain entities had traded in the scrip on the basis of unpublished price sensitive information.
On 10 July 2017, Divi's announced during market hours that the US Food and Drug Administration (FDA) lifted import alert regarding one of the company's units in Visakhapatnam. It was Unpublished Price Sensitive Information (UPSI).
Maddineni purchased 4,000 shares of the company on 10 July 2017, two and half hours ahead of the disclosure, SEBI said.