India's capital markets watchdog, the Securities and Exchange Board of India (Sebi), is launching a record number of investigations, leveraging advanced technology to detect market irregularities. However, this aggressive push is creating a growing backlog, as each case is now built with unprecedented detail to withstand legal challenges.
A Surge in Scrutiny: The Numbers Tell the Story
The data reveals a significant shift in the regulator's enforcement activity. In the financial year 2024-25, Sebi took up 400 fresh investigations and completed 301. This marks a sharp increase from the previous year, FY24, which saw 342 new probes and 197 completions. The trend becomes even clearer when compared to FY23, where only 144 new investigations were initiated and 152 were finished.
This indicates that while the absolute number of probes concluded has grown, the rate of new case openings has accelerated dramatically since FY24, leading to a net increase in workload.
Building Fortresses: The Drive for Watertight Cases
The nature of Sebi's investigations has transformed. Facing increased scrutiny and reversals at the Securities Appellate Tribunal (SAT), the regulator is now focusing on constructing exceptionally detailed and robust cases. Technology and artificial intelligence are key enablers, allowing Sebi to track complex trading patterns more easily.
"Sebi investigations are becoming more watertight and thorough," noted KC Jacob, partner at Economic Laws Practice. "It is asking for a lot more things in their notices."
This new approach is evident in recent high-profile interim orders. In the case against social media influencer Avadhut Sathe, Sebi issued a 125-page order that functioned like a forensic case study. It dissected video recordings of his trading lessons, included dated screenshots and verbatim statements, examined WhatsApp chats, and analyzed the trading accounts of followers he promoted. The order meticulously showed that Sathe and his firm were actually incurring losses, contradicting their advisory claims.
Similarly, the 105-page order against high-frequency trading firm Jane Street dedicated sections to explaining basic financial concepts and used detailed charts, tables, and even a QR code to map allegedly manipulative trades in Bank Nifty contracts. This academic style marks a departure from older orders that primarily presented conclusions upfront with supporting evidence, rather than walking the reader through the investigative logic step-by-step.
Learning from Setbacks: The SAT Effect
A major catalyst for this change is Sebi's experience before the SAT, which has criticized the regulator for investigative loopholes. Several high-profile orders have been set aside or modified by the tribunal.
In October 2023, SAT set aside Sebi's order barring Zee's Punit Goenka from holding key positions. In August 2025, it intervened in the case against IIFL Securities' former director Sanjiv Bhasin, allowing his trading accounts to be unfrozen. The tribunal also overturned Sebi's decision in the Rohit Salgaocar insider trading case, allowing cross-examination of key witness Ketan Parekh.
"Sebi is also learning from its appellate experiences before SAT and other judicial forums," said Sidharth Kumar, senior associate at BTG Advaya and a former Sebi official. "Its enforcement orders have become more detailed and academic, explaining all nuances related to a case."
This feedback loop is having a tangible impact. New appeals against Sebi's orders at the SAT fell to 533 in FY25 from 821 in FY24, suggesting more orders are being crafted to survive initial legal challenges.
Expanded Team, Growing Backlog
To handle this intensified workload, Sebi has significantly expanded its investigations wing. The Investigations Department (IVD) has grown from a single vertical with about five or six divisions in 2023 to three verticals with 23 divisions by 2025.
Despite this expansion and improved efficiency—with investigations now reportedly completed in one to two years versus four to five years previously—the backlog is rising. Pending cases under Section 11 of the Sebi Act, which grants the regulator its core powers, increased to 169 in FY25 from 145 in FY24.
Experts point to the complexity of modern frauds, often involving unregistered investment advisors operating via social media, and the logistical challenges of evidence collection in remote areas as factors prolonging investigations. "That itself makes investigations longer, but also more robust," explained Kumar.
The result is a regulator walking a tightrope: using cutting-edge tools to cast a wider net than ever, while simultaneously digging deeper into each case to build legally impregnable arguments, a strategy that is reshaping India's market enforcement landscape.
