However, the exact nature of disgorgement has largely remained elusive and its interpretation and implementation have been fraught with contradictory opinions. It is in this case that the US Supreme Court held that disgorgement is a penalty in the context of Section 246215 of the Securities Exchange Act, 1934. The SAT set aside this disgorgement order and held that the actions of NSE in not complying with a SEBI Circular would invite a penalty and not a disgorgement order. However, SAT’s interpretations as well as the SEBI Act indicates it to be an equitable remedy and not a penalty. ConclusionFrom the above discussion, it is clear that disgorgement is seen more as a compensatory and equitable remedy than as a penalty in India.

Source: Mint June 24, 2024 09:35 UTC