Yes Bank insider trading case: 16 of 19 executives likely to settle with Sebi
Mumbai, Mar 9, 2026
Synopsis
With the spotlight on Yes Bank's insider trading scandal, many of the involved executives are leaning towards settlements with Sebi, while just three are gearing up for a courtroom battle. The regulator's inquiries were sparked by a high-profile investment from private equity titans, Carlyle and Advent.
Most of the 19 executives named in a Securities and Exchange Board of India notice for alleged insider trading in Yes Bank shares will settle with the regulator, with only three actively challenging the allegation, a senior person with direct knowledge of the matter told ET.
These executives-including a former board member of the bank and his friends, as well as senior executives of private equity firms Carlyle and Advent and professional services companies EY and PwC-and their lawyers are in the process of completing the formalities and filing settlement applications with Sebi, the person said.
Sebi issued the show-cause notice after its investigation into potential insider trading and market manipulation laid bare the lackadaisical observation of secrecy and Chinese walls in the most elite echelons of India's capital markets.
The regulator launched the probe after Yes Bank announced a combined ₹8,900 crore investment from Carlyle and Advent for a 10% stake each in the lender. The unpublished price sensitive information period for the deal was considered to be from December 10, 2021 to July 29, 2022, when the lender announced its board approval for the investment. Sebi probed trading in the bank's stock between June 9, 2021 and January 30, 2023.
In the show-cause notice, Sebi alleged that a former board member of the bank, who also was part of its audit committee, shared information on the deal with a couple who were close friends. In another instance cited by the regulator, a private equity executive allegedly discussed the deal with a neighbouring couple who later traded in the shares. Another private equity executive is alleged to have discussed the proposed transaction with a venture capital fund manager known to him, and subsequently the latter's mother traded in the stock, the notice said.
A partner at a Big Four professional services firm traded in the shares after receiving information from two colleagues, although one tranche of the trade had been disclosed to his firm as per compliance guidelines, according to the Sebi document.
Following amendments to the Sebi (Prohibition of Insider Trading) Regulations in December 2024, which expanded compliance obligations beyond individuals to the broader institutional ecosystem handling unpublished price-sensitive information (UPSI), the regulator has also looked into the role of professional services firms involved in the deal.
In its show-cause notice, Sebi named eight current and former partners from professional services firms-five from EY and three from PwC-holding them responsible for alleged failures to comply with insider-trading compliance rules.
Although they have no role in passing on information or trading, the regulator asked the partners to explain why monetary penalties and other regulatory action should not be imposed for the compliance lapses.
Sebi, EY, PwC, Advent and Carlyle did not respond to ET's queries. The Yes Bank director could not be reached for comment.
ET on February 4 and March 4, 2022, reported that Advent and Carlyle were in discussions with Yes Bank for a potential $1 billion investment.
Negligible penalties
Legal experts said Sebi's scrutiny will increase on India's growing private equity and deal ecosystem, which includes board members, foreign funds, professional services firms, law firms and other deal intermediaries that routinely handle market-sensitive information.
Sumit Agrawal, senior partner at boutique regulatory advisory firm Regstreet Law Advisors, said Sebi expectation is clear: robust Chinese walls, tightly documented due-diligence processes, strict need-to-know access, controlled data rooms and disciplined communication protocols.
"As PE funds acquire substantial stakes in listed entities while seeking to avoid 'promoter' classification, scrutiny will only intensify around beneficial owner disclosures, insider lists, deal-team ring-fencing, co-investor information flows and leakage risks across the advisory ecosystem," said Agrawal, a former Sebi officer.
"Chinese walls are long but not high enough," quipped one former Big Four partner.
[The Economic Times]
