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Apart from the bank, the six persons who settled the case are — Ashish Agrawal, Niranjan Banodkar, Sanjay Nambiar, Devamalya Dey, Rajat Monga and Shivanand Shettigar.

The order comes after the entities approached Sebi to settle the proceedings initiated against them “without admitting or denying the findings of fact and conclusions of law”, through a settlement order. In a settlement order on Tuesday, Sebi said,” the instant adjudication proceedings initiated against applicants vide SCN (show cause notice) dated October 26, 2020 are disposed of”.

The regulator conducted an investigation in the affairs of Yes Bank during February 2019 to ascertain the possible violation of provisions of Sebi Act and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices).

Pursuant to the investigation, Sebi observed certain violations were allegedly committed by the bank and the six persons and issued show cause notice to them in this regard in October 2020.

In the show cause notice, it was alleged that Yes Bank made a selective disclosure on February 13, 2019, highlighting “nil” divergence which had significant positive impact on the price movement and had not disclosed other issues mentioned in the Risk Assessment Report (RAR) as observed by RBI such as lapses and regulatory breaches in various areas of its functioning.

It was alleged that announcement made by Yes Bank to exchanges were “incomplete as only selective disclosures highlighting nil divergence in bank’s asset classification and provision from RBI norms were disclosed as per the RAR of RBI.”

“However, other lapses and regulatory breaches in various areas as identified in the RAR were not disclosed,” the order noted.

The announcement resulted in misleading the investors as the price of the scrip increased by around 30 per cent and volume of trading the scrip also increased substantially the next trading day i.e. February 14, 2019.

It was alleged that the bank and six persons, who were involved in the decision making process to make the information public, have violated the provisions of PFUTP norms.

The six persons were either a member of the Reputational Risk Management Committee (RRMC) or part of the decision making process in relation to the disclosures made on February 13, 2019. Pending adjudication proceedings, the applicants proposed to settle the proceedings initiated against them and filed settlement applications.

Thereafter, Sebi’s committee recommended that the case may be settled upon payment of Rs 1.65 crore by applicants on jointly and several liability basis and accordingly they remitted the amount. Consequently, the Securities and Exchange Board of India (Sebi) settled the case.