Sujoy Datta & Uma Lohray writes about consent orders in Securities Regulations with a review of the SEBI and SEC mechanism.


Consent Settlement, a universal feature of securities regulatory systems internationally, has recently become a source of debate in both India and the USA. SEBI and the SEC both have faced a series of challenges on similar grounds to their systems, and the differing Constitutional and Administrative Laws of the two nations mirror the differing results of these challenges. While a public interest litigation in the Delhi High Court has successfully galvanized the legal community into increased interest in the mechanism’s flaws and ushered in SEBI’s May 25th Amendments to its 2007 Circular, the controversial and celebrated order by Judge Rakoff in the Citigroup settlement has been overturned at appeal. The authors of the paper compare the Indian and American systems in the light of their Constitutional and Administrative laws, contextualizing and analyzing the Indian amendment in the light of differing status of the Judiciaries in matters of judicial review of administrative actions and policy decisions and questions of public interest. While the Amendments in India have indubitably mitigated the lacunae in the system, there are still windows for discretion, which might prove ruinous for the attempt at reform. The paper examines and analyzes these areas of the 2012 amendments and attempts to answer the question that’s been pushed to the forefront of the legal community’s debates by the recent developments in the Indian and American situations: “Has the Indian Consent Order System Been Saved?”