SEBI issued Recovery Certificate No. RC7969 of 2024 against Sandip Agarwal (PAN: ACGPA2796K) on June 12, 2026, for illiquid stock options violations. Recovery certificates are legal instruments issued under SEBI Act Section 28A for collecting penalties and disgorgement amounts when violators fail to pay voluntarily. This enforcement action demonstrates SEBI's strengthened recovery mechanism following regulatory violations in securities markets, particularly derivative trading irregularities.

Recovery certificates represent SEBI's strongest enforcement tool for collecting unpaid penalties, disgorgement, and interest from securities law violators. Under Section 28A of SEBI Act 1992, these certificates carry the force of court decrees, enabling asset attachment, bank account freezing, and property seizure. The illiquid stock options case involves complex derivative trading violations where manipulative practices create artificial liquidity constraints, harming retail investors. SEBI's recovery proceedings follow a structured process: initial penalty order, demand notice, opportunity for voluntary payment, and finally recovery certificate issuance. The certificate empowers District Collectors as recovery officers with powers similar to land revenue recovery, including attachment of movable/immovable property. This mechanism addresses the critical challenge of enforcement in securities regulation where violators often delay or avoid payments. The Sandip Agarwal case exemplifies SEBI's zero-tolerance approach toward market manipulation, particularly in derivative segments where retail participation has surged post-COVID. Recovery certificates ensure that regulatory deterrence translates into actual financial consequences, strengthening market integrity and investor confidence.