Rana, Mahim and Guru were close friends, who had great interest in the stock market. Gradually, they started trading in stocks and options using various platforms. Whilst they were trying to invest safely, with smaller q

Rana, Mahim and Guru were close friends, who had great interest in the stock market. Gradually, they started trading in stocks and options using various platforms. Whilst they were trying to invest safely, with smaller quantum of money, they were unable to make large gains. During one of the conversations about markets, Guru suggested Rana and Mahim, that they should avail some professional advisory services which would give them inputs about trading in stocks. One of Guru's cousins, had made good money by investing based on the tips he got on whatsapp and telegram apps. Guru, Rana and Mahim also became part of that whatsapp group, and were getting regular updates about stocks. The updates they got were mostly forwarded messages and they made good amount of money using those tips. Gradually, over couple of years, they accumulated funds and were investing higher amount of money. In February 2023, SEBI vide its order imposed a penalty of ₹ 20 Lakhs each on Guru, Rana and Mahim for violating Section 12 A(d) & 12 A (e) of the SEBI Act 1992 and Regulation 3(1) of SEBI (Prohibition of Insider Trading) Regulations, 2015. An appeal was filed by Guru, Rana and Mahim before SAT, stating that they had not violated any provisions, as they just received information by way of forwarded messages on whatsapp. Comment in the background of relevant case law.