This article is written by Ramanuj Mukherjee, CEO, LawSikho.
Google this term: securities litigation course. The first few results you will get are related to courses at Stanford, Harvard, Duke and Columbia Law Schools. Then you land into the litigation library at LawSikho. There is nothing in between, although there is a thriving market for securities litigation, which is growing as stock market activity grows and matures in India.
As India is becoming a more formal economy, and startups are maturing enough to list on the stock exchange, guess what work is growing rapidly? Yes, it is securities litigation of all kinds.
Actually, in our country, there are a lot of securities laws courses. These courses talk about the basics of securities regulations. They also discuss some case laws. But none of them even promise to prepare you to practice as a securities litigator!
Don’t believe me, just ask the course providers. Can I argue my own cases in SAT after doing your course? And see what they have to say. They will fumble, jumble and crumble.
That’s crazy. What is the point of doing a theoretical securities law course and not learning to do the actual work before the tribunal? Or maybe at least learn to do capital market transactions?
Securities litigation is specialized work. You have to specifically learn how to do this work. It needs an in-depth understanding of how the securities laws work, and a grasp of procedural and strategic aspects. It is not everyone’s cup of tea.
But why then, would you, get into the securities litigation field?
Existence of a Solid Market
If you do acquire this specialisation, the kind of growth you can create is unimaginable. This is a relatively uncrowded field that is at the same time highly well remunerated. I never understood why so many people who are crazy about corporate litigation or M&A do not pursue securities litigation instead, given that there is as much money in it while there are fewer people trying to break into it!
Check out how many large brokerage firms are there in this country. They aren’t exactly skilled in how the SEBI regulations apply to them and how they can avoid getting in the bad books of SEBI. It’s true that smaller firms can have a lower-paying capacity, but if you make a name for yourself, people see you as a medium of getting assured results and then they are willing to pay. Much like people would be willing to pay a dietician whose maximum clients have achieved expected weight losses.
Also, consider this: brokers are only one type of the many intermediaries regulated by SEBI. There are a significant number of mid-sized portfolio management and investment advisory firms, which though claim to be a pro in share movements, are not very clear of what SEBI regulations apply to them and what compliance is expected of them.
In addition to these, SEBI has a significant role to play in the registration and regulation of registrars and share transfer agents, debenture trustees and also ‘investment advisors’.
In smaller sized firms, a notice from SEBI may spell terror. Many of these may not have an in-house legal department and have no clue how to deal with it. If you appear to be someone who knows exactly how to deal with this, they will be very interested in you.
Interestingly, since the last presiding officer of the Securities Appellate Tribunal has been appointed, the tribunal is as questioning of the regulator as it is of the industry. It has been giving due importance to the principles of natural justice. Hence the fact that you have SEBI as the opposite party does not come in the way of your getting a judgment in your favor as long as you have firm grounds in fundamentals of securities laws and have been denied opportunities against natural justice.
Often, the company secretarial functions of listed entities are not aware of how exactly to build systems ensuring compliance with the SEBI regulations applicable to them as listed entities, and they require assistance from securities law experts. Someone who has an in-depth understanding of what exactly regulators look for and have handled litigations will be able to guide on establishing systems in a company that can prove that the entity took all steps possible and does not deserve a penalty.
Apart from this, there are a lot of offenses under various securities laws from insider trading to securities fraud, and processes such as compounding of offences and consent mechanism. All of these represent a golden opportunity for securities litigators.
It is Intellectually Stimulating
Many people broke their heads trying to understand how the big bulls of the securities market like Harshad Mehta, Ketan Parekh, C. R. Bhansali, etc. operated. Even to date, things like these keep happening, since somewhere, someone tries to tilt the balance of the market in their favor and take the benefit of unwary gullible investors.
If you’re thorough in understanding what constitutes conduct enough to initiate a legal proceeding, you can work for SEBI as something like an ‘ethical hacker in the securities market’. You can also work in defence of corporate bigwigs who have been accused of various offences or wrongdoing.
Securities laws are very stimulating intellectually, and litigation can be even more so since you would thoroughly need to get a grip on and understand the facts and the intent behind the actions before applying the law. It’s not all procedural and dry.
The Rewards are Attractive
Take this example – under Section 15HA of the Securities and Exchange Board of India Act, 1992, where a person engages in fraudulent or unfair trade practices in the securities market, he is liable to pay a penalty which shall not be less than five lakh rupees but which may extend to twenty five crore rupees or three times the amount of profits made out of such practices, whichever is higher.
Think of this – someone can be fined rupees five lakhs in the minimum and depending upon how serious the regulator considers the violation to be, the penalties may run into hundreds of crores. If someone has been fined ten lakh rupees and if you represent them before SEBI / Securities Appellate Tribunal (SAT) and your arguments are effective enough to demonstrate that the client took all steps as required and SEBI / SAT are convinced for the penalty to be reduced to half, the client wouldn’t mind paying you a hefty fee. What could it be? Any guesses?
Penalty for insider trading is even higher than that as in the minimum amount of penalty is rupees ten lakhs. These matters, therefore, have significant financial implications for a client and as a corollary, lawyers who can effectively represent such clients are paid handsomely.
Sustained practice may enable earnings in other spheres
If you are frequently representing clients before the Securities Appellate Tribunal, you might be able to guide clients on how they should develop their systems so that they do not land themselves in trouble with SEBI. You may also be able to help with how to document and keep a record/track of transactions, since matters may even be taken up by SEBI after a period of 5-7 years. The consultancy and advisory fees here will also be of a decent level since the clients can otherwise be subject to heavy penalties.
A sustained practice may also enable you to write books, offer corporate training, and become a well-paid professional speaker. As I am writing this, I cannot find any books on Amazon about the Securities Appellate Tribunal except for a compendium of cases – there’s immense scope.
Many tribunal lawyers have written books about various matters dealt with by specific tribunals and this often goes into many editions. Apart from that, there is a high demand for trainers who can explain how securities laws work to directors and top executives.
You may end up being an SAT member!
How great would it be if you end up on the other side of the tribunal! Many people have this belief that no one other than judges can become tribunal members, but under the Securities and Exchange Board of India Act, 1992, only the presiding officer of the SAT needs to be a sitting or retired judge. If you have demonstrated consistent capacity in dealing with problems in the securities market, as discussed above, have a few books to your name and clients have consistently valued your opinion, nothing stops you from being inducted as a tribunal member. Further, currently, there is only one bench of the SAT, but there would certainly be more regional benches in the years to come and there will be a lack of people having this niche knowledge. I personally know of a company secretary and lawyer who ended up being on the primary markets advisory committee of SEBI due to his sheer knowledge. Nothing stops you from doing big things except for your own limiting beliefs.
So are you going to let your limiting beliefs stop you from taking the first step towards gaining this knowledge? Don’t. Enroll here and work your way through the amazing field of securities litigation.
And yes, we assure you that you will be able to argue your own cases before SAT and do a lot of the work described above after you do this course. It may take you a long time to get really good at it, but in the next 3 months, you could learn all the basics rapidly, as much as what new entrants take 2-3 years to learn.
Here are some other courses you can enroll in until 15th:
Diploma
Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution
Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions)
Diploma in Entrepreneurship Administration and Business Laws
Executive Certificate Courses
Certificate Course in Advanced Corporate Taxation
Certificate Course in Insolvency and Bankruptcy Code
Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting
Certificate Course in Legal Practice Development and Management
Certificate Course in Securities Laws, Insider Trading and SEBI Litigation
Certificate Course in Media and Entertainment Law: Contracts, Licensing and Regulations
