SECURITIES & EXCHANGE BOARD OF INDIA vs KISHORE R.AJMERA

The Supreme Court addressed the liability of brokers and sub-brokers under the Securities and Exchange Board of India (SEBI) regulations, specifically the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations and the Securities and Exchange Board of India (Stock-Brokers and Sub-Brokers) Regulations, 1992. The Court established that a broker can be held vicariously liable for the fraudulent activities of sub-brokers if negligence and lack of due care are proven. The Court upheld the findings of the lower authorities that the respondent broker was liable for facilitating manipulative trading practices, resulting in a ruling against him.