While Kaul has been fined Rs 50 lakh, his wife Bala Kaul has been handed a fine of Rs 10 lakh, Sebi said in two separate orders.

The case relates to the sale of 6.5 lakh shares in Orchid Chemicals & Pharmaceuticals (OPCL) by Bear Sterns in March, 2008.

The scrip saw a huge fall in the last half of March, 2008, but then recovered significantly. Several alerts were generated at the NSE and BSE and the scrip was taken up for joint investigation by the exchanges on the basis of which a report was submitted by them in April that year.

Bala Kaul had bought shares of OCPL from stockbroker Religare Securities Ltd on March 27-28, 2008, just prior to the start of share buying by Solrex, a Ranbaxy holding company, on March 31, 2008.

She bought a total of 35,000 shares at an average price of Rs 131.71 and sold them on April 10, 2008, at an average price of Rs 219.94, the Sebi said in its order.

V K Kaul was at that time serving as an independent director in Ranbaxy Laboratories.

"... It was alleged that noticee (V K Kaul), being a connected person of Ranbaxy Laboratories as per Regulation 2 (c) (i) of Sebi (Prohibition of Insider Trading) Regulations, 1992, had traded on behalf of his wife in the scrip of OCPL based on unpublished price sensitive information...," Sebi said, adding that it led to a violation of its regulations.

Sebi's Integrated Surveillance Department had also asked the NSE to examine the trading activity in the scrip.

The findings pointed toward insider trading by Bala Kaul and it was observed that her husband had provided her with funds to trade in the scrip of OCPL.

Sebi had in April, 2008, sent a show-cause notice to the Kauls to which the noticees gave their replies.

Refuting the noticees contentions, the regulator said that based on circumstantial evidence, "It can be reasonably concluded that the noticee had received/access to Unpublished Price Sensitive Information (UPSI)."